UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
VOLCANO
CORPORATION
(Name of Subject Company (Issuer))
CLEARWATER MERGER SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
(Names of Filing Persons (Offerors))
Common Stock,
par value $0.001
(Title of Class of Securities)
928645100
(Cusip Number of
Class of Securities)
Joseph E. Innamorati
Clearwater Merger Sub, Inc.
3000 Minuteman Road
Andover, MA 01810
(978)
687-1501
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copies to:
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Matthew G. Hurd
Rita-Anne ONeill
Sullivan & Cromwell LLP
1888 Century Park East, Suite 2100
Los Angeles, CA 90067 (310)
712-6600 |
CALCULATION OF FILING FEE
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Transaction Valuation* |
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Amount of Filing Fee** |
$1,266,918,102 |
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$147,215.88 |
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* |
Estimated solely for purposes of calculating the filing fee. The transaction value calculation does not take into account the effect of any cash received or deemed received by Volcano Corporation (the
Company) in connection with the exercise of any outstanding equity awards. The transaction value was determined by multiplying (a) $18.00, the tender offer price, by (b) the sum of (i) 51,610,342, the number of issued and
outstanding shares of Company common stock, (ii) 2,798,233, the number of shares of Company common stock subject to issuance pursuant to options to purchase shares of Company common stock, (iii) 87,525, the number of shares of Company
common stock estimated to be subject to outstanding purchase rights under the Volcano employee stock purchase plan (assuming that the closing price per share of Company common stock as reported on the purchase date for the current offering period
was equal to the tender offer price), (iv) 1,033,139, the number of shares of Company common stock subject to or otherwise deliverable in connection with restricted stock units of the Company, and (v) 14,855,100, the number of shares of
Company common stock subject to issuance pursuant to outstanding warrants. The foregoing share figures have been provided by the issuer to the offerors and are as of December 15, 2014. |
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The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2015, issued August 29, 2014, by multiplying the
transaction value by 0.0001162. |
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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. |
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Amount Previously Paid: |
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Not applicable. |
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Filing Party: |
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Not applicable. |
Form or Registration No.: |
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Not applicable. |
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Date Filed: |
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Not applicable. |
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
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third-party tender offer subject to Rule 14d-1. |
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issuer tender offer subject to Rule 13e-4. |
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going-private transaction subject to Rule 13e-3 |
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amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment
reporting the results of the tender offer. ¨
If applicable, check the appropriate box(es) below
to designate the appropriate rule provision(s) relied upon:
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Rule 13e-4(i) (Cross-Border Issuer Tender Offer) |
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Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Tender Offer Statement on Schedule TO (this Schedule TO) relates to the offer by
Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation (Parent) and a wholly owned subsidiary of Koninklijke Philips N.V., a
corporation organized under the laws of The Netherlands (Royal Philips), to purchase all of the outstanding shares of common stock, par value $0.001 per share, of Volcano Corporation, a Delaware corporation (the Company),
including any associated rights to purchase capital stock issued pursuant to the Rights Agreement, dated June 20, 2006, by and between the Company and American Stock Transfer & Trust Company, LLC (such rights, together with such shares
of the Companys common stock, the Shares), at a price per Share of $18.00 net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the offer to
purchase, dated December 30, 2014 (the Offer to Purchase), and in the related Letter of Transmittal (the Letter of Transmittal), copies of which are attached hereto as Exhibits (a)(1)(i) and (a)(1)(ii), respectively
(which, together with any amendments or supplements thereto, collectively constitute the Offer).
Items 1 through 9; Item 11.
All information contained in the Offer to Purchase and the accompanying Letter of Transmittal, including all schedules thereto, is hereby
incorporated herein by reference in response to Items 1 through 9 and Item 11 in this Schedule TO.
Item 10. Financial Statements.
Not applicable.
Item 12. Exhibits.
See Exhibit Index.
Item 13.
Information Required by Schedule 13E-3.
Not applicable.
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.
Dated: December 30, 2014
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CLEARWATER MERGER SUB, INC. |
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By: |
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/s/ Joseph E. Innamorati |
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Name: Joseph E. Innamorati |
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Title: Vice President and Secretary |
EXHIBIT INDEX
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Index No. |
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(a)(1)(i) |
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Offer to Purchase dated December 30, 2014. |
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(a)(1)(ii) |
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Form of Letter of Transmittal. |
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(a)(1)(iii) |
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Form of Notice of Guaranteed Delivery. |
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(a)(1)(iv) |
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Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
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(a)(1)(v) |
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Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
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(a)(1)(vi) |
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Summary Advertisement as published in The New York Times on December 30, 2014. |
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(a)(5)(i) |
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Joint Press Release issued by Royal Philips and Volcano Corporation, dated December 17, 2014 (incorporated by reference to Exhibit 99.1 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on
December 17, 2014). |
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(a)(5)(ii) |
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Presentation to employees of Volcano Corporation on December 17, 2014 (incorporated by reference to Exhibit 99.1 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(iii) |
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Transcript of video presentation by Frans van Houten, President and CEO of Royal Philips, posted on Philips external website on December 17, 2014 (incorporated by reference to Exhibit 99.2 of the Tender Offer Statement on
Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(iv) |
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Transcript of video presentation by Frans van Houten, President and CEO of Royal Philips, posted on Royal Philips internal website on December 17, 2014 (incorporated by reference to Exhibit 99.3 of the Tender Offer Statement
on Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(v) |
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Email sent to Royal Philips employees on December 17, 2014 (incorporated by reference to Exhibit 99.4 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(vi) |
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Email sent to employees of Royal Philips Image Guided Therapy Division on December 17, 2014 (incorporated by reference to Exhibit 99.5 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on
December 17, 2014). |
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(a)(5)(vii) |
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Announcement posted on Royal Philips internal website on December 17, 2014 (incorporated by reference to Exhibit 99.6 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on
December 17, 2014). |
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(a)(5)(viii) |
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Letter to Royal Philips Customers, dated December 17, 2014 (incorporated by reference to Exhibit 99.7 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(ix) |
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Letter to Royal Philips Suppliers, dated December 17, 2014 (incorporated by reference to Exhibit 99.8 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on December 17, 2014). |
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(a)(5)(x) |
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Presentation to employees of Royal Philips Image Guided Therapy Division on December 17, 2014 (incorporated by reference to Exhibit 99.9 of the Tender Offer Statement on Schedule TO-C filed by Royal Philips on
December 17, 2014). |
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(d)(1) |
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Agreement and Plan of Merger, dated as of December 16, 2014, by and among Volcano Corporation, Parent and Purchaser (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Volcano Corporation on
December 17, 2014). |
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(d)(2) |
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Guarantee, dated as of December 16, 2014, by Royal Philips in favor of Volcano Corporation. |
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(d)(3) |
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Confidentiality Agreement, dated June 23, 2014, between Royal Philips and Volcano Corporation. |
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Index No. |
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(d)(4) |
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Consulting Agreement, dated December 16, 2014, between Purchaser and R. Scott Huennekens. |
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(d)(5) |
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Retention Agreement, dated December 16, 2014, between Purchase and Joseph Burnett. |
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(g) |
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Not applicable. |
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(h) |
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Not applicable. |
Exhibit (a)(1)(i)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
by
CLEARWATER MERGER SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JANUARY 29, 2015 (ONE
MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015), UNLESS THE OFFER IS EXTENDED.
The Offer (as defined
below) is being made pursuant to the Agreement and Plan of Merger, dated as of December 16, 2014 (as it may be amended, modified or supplemented from time to time in accordance with its terms, the Merger Agreement), by and among
Volcano Corporation, a Delaware corporation (Volcano), Philips Holding USA Inc., a Delaware corporation (Parent), and Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary
of Parent. Purchaser is offering to purchase all of the shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock (such rights, together with such shares of the Companys common stock, the
Shares), of Volcano that are issued and outstanding at a price of $18.00 per Share, net to the seller in cash (the Offer Price), without interest, less any applicable withholding taxes, upon the terms and subject to the
conditions set forth in this offer to purchase (this Offer to Purchase) and the related letter of transmittal (the Letter of Transmittal), which, together with any amendments or supplements hereto and thereto, collectively
constitute the Offer.
Pursuant to the Merger Agreement, immediately following the time we accept, for the first time, for
payment Shares validly tendered and not properly withdrawn pursuant to the Offer (the Offer Acceptance Time) and subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, Purchaser will merge
with and into Volcano (the Merger) without a meeting of the stockholders of Volcano in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the DGCL), with Volcano continuing as the
surviving corporation (the Surviving Corporation) in the Merger and as a wholly owned subsidiary of Parent. At the effective time of the Merger (the Effective Time), each Share then outstanding (other than Shares that are
held by any stockholders who properly demand appraisal in connection with the Merger as described in Section 17 Certain Legal Matters; Regulatory ApprovalsAppraisal Rights) will be converted into the right to
receive the Offer Price, without interest, less any applicable withholding taxes, except for Shares then owned by Parent, Purchaser or any other wholly owned subsidiary of Parent, and Shares held by Volcano or by any of its wholly owned
subsidiaries, which Shares will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor. Under no circumstances will interest be paid with respect to the purchase of Shares pursuant to the Offer,
regardless of any extension of the Offer or any delay in making payment for Shares.
THE BOARD OF DIRECTORS OF VOLCANO UNANIMOUSLY RECOMMENDS THAT YOU
TENDER ALL OF YOUR SHARES PURSUANT TO THE OFFER.
After careful consideration, the board of directors of Volcano (the Volcano Board)
has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the
Merger will be subject to Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the
Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their shares to Purchaser pursuant to the Offer.
The Offer is not subject to any financing condition. The Offer is conditioned upon: (i) there being validly tendered (not
including any Shares tendered pursuant to guaranteed delivery procedures that were not actually delivered prior to 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015) (the
Expiration Date, unless Purchaser extends the Offer pursuant to and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean the latest time and date at which the Offer, as so extended by
us, will expire)) and not validly withdrawn prior to the Expiration Date Shares that, considered together with all other Shares (if any) beneficially owned by Parent and its subsidiaries immediately prior to the Offer Acceptance Time, represent one
Share more than 50% of the sum of (x) the total number of Shares outstanding at the time of the expiration of the Offer and (y) the aggregate number of Shares that Volcano may be required to issue upon conversion, settlement or exercise of
all then outstanding options, benefit plans, obligations or securities convertible or exchangeable into Shares, or other rights to acquire or be issued Shares (including all then outstanding options granted or outstanding under the Volcano Equity
Plans (as defined herein), warrants to purchase Shares and convertible notes issued by Volcano), for which Volcano has received notices of exercise or conversion prior to the expiration of the Offer (and as to which Shares have not yet been issued);
(ii) receipt of any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder and approvals under applicable foreign antitrust, competition or fair trade laws in certain jurisdictions set forth in the Merger Agreement; and (iii) other customary conditions as described in this Offer
to Purchase. See Section 15 Conditions to the Offer. After the Offer Acceptance Time and subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, Parent, Purchaser and Volcano
will cause the Merger to become effective immediately without a meeting of the stockholders of Volcano in accordance with Section 251(h) of the DGCL.
A summary of the principal terms of the Offer appears on pages i through viii of this Offer to Purchase. You should read this entire
Offer to Purchase and the Letter of Transmittal carefully before deciding whether to tender your Shares pursuant to the Offer.
December 30, 2014
IMPORTANT
If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should, prior to the Expiration Date,
(i) complete and execute the Letter of Transmittal that is enclosed with this Offer to Purchase in accordance with the instructions contained therein, and mail or deliver the Letter of Transmittal together with the certificates representing
your Shares and any other required documents, to American Stock Transfer & Trust Company, LLC, in its capacity as depositary for the Offer (the Depositary), (ii) tender your Shares by book-entry transfer by following the
procedures described in Section 3 Procedures for Accepting the Offer and Tendering SharesBook-Entry Transfer or (iii) if applicable, request that your broker, dealer, commercial bank, trust company or other
nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such nominee in order to tender your Shares to Purchaser pursuant to the Offer.
If you desire to tender your Shares pursuant to the Offer and the certificates representing your Shares are not immediately available, or
you cannot comply in a timely manner with the procedures for tendering your Shares by book-entry transfer or you cannot deliver all required documents to the Depositary prior to the Expiration Date, you may tender your Shares to Purchaser pursuant
to the Offer by following the procedures for guaranteed delivery described in Section 3 Procedures for Accepting the Offer and Tendering SharesGuaranteed Delivery.
The Letter of Transmittal, the certificates for the Shares (if not held in book-entry form) and any other required documents must reach the
Depositary before the expiration of the Offer (currently scheduled for 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015), unless extended).
*****
Questions and requests
for assistance may be directed to Georgeson Inc., the information agent for the Offer (the Information Agent), at the address and telephone number set forth below. In addition, requests for additional copies of the Offer to Purchase, the
Letter of Transmittal, the notice of guaranteed delivery and other tender offer materials may be directed to the Information Agent. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.
Additionally, copies of this Offer to Purchase, the related Letter of Transmittal and any other material related to the Offer may be obtained at the website maintained by the Securities and Exchange Commission at www.sec.gov.
This Offer to Purchase and the Letter of Transmittal contain important information, and you should read both carefully and in their
entirety before making a decision with respect to the Offer.
TABLE OF CONTENTS
SUMMARY TERM SHEET
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Securities Sought: |
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All of the shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock (such rights, together with such shares of the Companys common stock, the Shares), of
Volcano Corporation, a Delaware corporation (Volcano), that are issued and outstanding. |
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Price Offered Per Share: |
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$18.00 per Share, net to the seller in cash (the Offer Price), without interest, less any applicable withholding taxes. |
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Scheduled Expiration Date: |
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12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015), unless the Offer (as defined below) is extended. |
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Purchaser: |
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Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation (Parent). Parent is a wholly owned subsidiary of
Koninklijke Philips N.V., a corporation organized under the laws of The Netherlands (Royal Philips). |
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Volcano Board Recommendation: |
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The board of directors of Volcano (the Volcano Board) has unanimously (i) determined that the Merger Agreement (as defined below) and the transactions contemplated thereby, including the Offer and the subsequent
merger of Purchaser with and into Volcano (the Merger), with Volcano surviving (the Surviving Corporation) as a wholly owned subsidiary of Parent are advisable to, and in the best interest of, Volcano and its stockholders;
(ii) agreed that the Merger will be subject to Section 251(h) of the General Corporation Law of the State of Delaware (the DGCL); (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the
consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their Shares to Purchaser pursuant to the Offer. |
The following are some questions that you, as a stockholder of Volcano, may have and answers to those
questions. This summary term sheet highlights selected information from this offer to purchase (this Offer to Purchase) and may not contain all of the information that is important to you and is qualified in its entirety by the more
detailed descriptions and explanations contained in this Offer to Purchase and the related letter of transmittal (the Letter of Transmittal), which, together with any amendments or supplements hereto and thereto, collectively constitute
the Offer. To better understand the Offer and for a complete description of the terms of the Offer, you should read this Offer to Purchase, the Letter of Transmittal and the other documents to which we refer you carefully and in their
entirety. Questions or requests for assistance may be directed to Georgeson Inc., our information agent (the Information Agent), at the address and telephone numbers set forth for the Information Agent on the back cover of this Offer to
Purchase. Unless otherwise indicated in this Offer to Purchase or the context otherwise requires, all references in this Offer to Purchase to we, our or us refer to Purchaser.
i
Who is offering to buy my Shares?
We are Clearwater Merger Sub, Inc., a Delaware corporation, or Purchaser, formed for the purpose of making the Offer and merging
with and into Volcano. We are a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation, or Parent. Parent is a wholly owned subsidiary of Royal Philips. We are making this Offer pursuant to the Agreement and Plan of
Merger, dated as of December 16, 2014 (as such may be amended or supplemented from time to time, the Merger Agreement), by and among Parent, Purchaser and Volcano. See the Introduction and Section 8
Certain Information Concerning Purchaser, Parent and Royal Philips.
How many Shares are you offering to purchase in the Offer?
We are making the Offer to purchase all issued and outstanding Shares on the terms and subject to the conditions set forth in this Offer to
Purchase and the Letter of Transmittal. See the Introduction and Section 1 Terms of the Offer.
Why are you
making the Offer?
We are making the Offer pursuant to the Merger Agreement, in order to acquire control of, and ultimately following
the Merger, the entire equity interest in, Volcano, while allowing Volcanos stockholders an opportunity to receive the Offer Price as soon as practicable after the Expiration Date (but no later than the first business day after the Expiration
Date) by tendering their Shares pursuant to the Offer. If the Offer is consummated, subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, we, Parent and Volcano will consummate the Merger immediately
thereafter without any action by the stockholders of Volcano in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the DGCL). At the effective time of the Merger (the Effective Time),
Volcano will become a wholly owned subsidiary of Parent. See Section 12 Purpose of the Offer; Plans for Volcano.
How much
are you offering to pay and what is the form of payment? Will I have to pay any fees or commissions?
We are offering to pay $18.00 per
Share, net to the seller in cash, without interest, less any applicable withholding taxes. If you are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar
expenses. If you own your Shares through a broker, dealer, commercial bank, trust company or other nominee and such nominee tenders your Shares on your behalf, such nominee may charge you a fee for doing so. You should consult with your broker,
dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See the Introduction, Section 1 Terms of the Offer and Section 2 Acceptance for
Payment and Payment for Shares.
What does the Volcano Board recommend?
After careful consideration, the Volcano Board has unanimously (i) determined that the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the Merger will be subject to Section 251(h) of the DGCL; (iii) approved the execution,
delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their Shares
to Purchaser pursuant to the Offer.
See the Introduction and Section 12 Purpose of the Offer; Plans
for Volcano and Volcanos Solicitation/Recommendation Statement on Schedule 14D-9 (the Schedule 14D-9) that is being filed with the Securities Exchange Commission (the SEC) and, together with this Offer
to Purchase, the Letter of Transmittal and other related materials, mailed to Volcanos stockholders in connection with the Offer.
ii
What are the most significant conditions to the Offer?
The Offer is conditioned upon, among other things:
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there being validly tendered (not including any Shares tendered pursuant to guaranteed delivery procedures that were not actually delivered prior to the Expiration Date (as defined below)) and not validly withdrawn
prior to the Expiration Date Shares that, considered together with all other Shares (if any) beneficially owned by Parent and its subsidiaries immediately prior to the Offer Acceptance Time (as defined below), represent one Share more than 50% of
the sum of (i) the total number of Shares outstanding at the time of the expiration of the Offer and (ii) the aggregate number of Shares that Volcano may be required to issue upon conversion, settlement or exercise of all then outstanding
options, benefit plans, obligations or securities convertible or exchangeable into Shares, or other rights to acquire or be issued Shares (including all then outstanding options granted or outstanding under Volcanos 2000 Long-Term Equity Plan
or Amended and Restated 2005 Equity Compensation Plan (collectively, the Volcano Equity Plans), warrants to purchase Shares and the Volcano Convertible Notes (as defined below)), for which Volcano has received notices of exercise or
conversion prior to the expiration of the Offer (and as to which Shares have not yet been issued) (the Minimum Condition); |
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receipt of any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder (the HSR Act) and approvals under applicable foreign antitrust, competition or fair trade laws in Germany, Austria, Japan, Taiwan and Israel (the Antitrust
Condition); and |
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other customary conditions described in this Offer to Purchase as set forth in Section 15 Conditions to the Offer. |
We and Parent may waive any condition, in whole or in part, other than the Minimum Condition, at any time and from time to time, without
Volcanos consent. See Section 15 Conditions to the Offer.
Is the Offer subject to any financing condition?
No. The Offer is not subject to any financing condition.
Do you have the financial resources to pay for all Shares?
Yes. The total amount of funds required by us to purchase all Shares pursuant to the Offer and the Merger and to pay related fees and expenses
is approximately $978 million. Royal Philips has guaranteed the full and timely performance by Parent and Purchaser of their respective obligations under the Merger Agreement including our payment obligations in respect of the Offer and will provide
funding for our acquisition of the remaining Shares in the Merger. Royal Philips expects to fund such cash requirements from its available cash on hand and a new bridge financing entered into for the purpose of financing the acquisition. See
Section 9 Source and Amount of Funds.
Is your financial condition relevant to my decision to tender pursuant to the
Offer?
No. We do not think that our financial condition is relevant to your decision whether to tender Shares and accept the Offer
because:
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the consummation of the Offer is not subject to any financing condition; |
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the Offer is being made for all Shares solely for cash; |
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if the Offer is consummated, we will acquire all remaining Shares in the Merger for the same cash price as was paid in the Offer (i.e., the Offer Price); and |
iii
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we, through Royal Philips, will have sufficient funds available to purchase all Shares validly tendered and not properly withdrawn pursuant to the Offer and to provide funding for the Merger. |
See Section 9 Source and Amount of Funds and Section 11 The Merger Agreement; Other
Agreements.
What percentage of Shares do you or your affiliates currently own?
None of Purchaser, Parent or Royal Philips or any of their respective affiliates currently own any Shares.
How long do I have to decide whether to tender pursuant to the Offer?
You will be able to tender your Shares pursuant to the Offer until 12:00 midnight, Eastern time, on January 29, 2015 (one minute after
11:59 P.M., Eastern time, on January 28, 2015) (the Expiration Date, unless Purchaser extends the Offer pursuant to and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean
the latest time and date at which the Offer, as so extended by us, will expire)). Further, if you cannot deliver everything that is required in order to make a valid tender in accordance with the terms of the Offer by the Expiration Date, you may be
able to use a guaranteed delivery procedure by which a broker, a bank or any other fiduciary that is an Eligible Institution (as defined in Section 3 Procedures for Accepting the Offer and Tendering SharesSignature
Guarantees) may guarantee that the missing items will be received by American Stock Transfer & Trust Company, LLC, our depositary for the Offer (the Depositary), within three NASDAQ Global Select Stock Market
(NASDAQ) trading days. Please give your broker, dealer, commercial bank, trust company or other nominee instructions in sufficient time to permit such nominee to tender your Shares by the Expiration Date. See Section 1
Terms of the Offer and Section 3 Procedures for Accepting the Offer and Tendering Shares.
Can the Offer be
extended and, if so, under what circumstances can or will the Offer be extended?
Yes, the Offer can be extended. In some cases, we are
required to extend the Offer beyond the initial Expiration Date, but in no event will we be required to extend the Offer beyond the Extension Deadline (as defined below).
Pursuant to the Merger Agreement, we are required to extend the Offer:
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for the minimum period required by any legal requirement, interpretation or position of the SEC or its staff or NASDAQ or its staff, in each case, applicable to the Offer; |
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for periods of up to ten business days per extension until any waiting period (and any extension thereof) applicable to the consummation of the Offer under the HSR Act and any foreign antitrust or competition-related
legal requirement has expired or been terminated; and |
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at the request of Volcano on one or more occasions for an additional period of up to ten business days per extension if, as of the scheduled Expiration Date, any Offer Condition (as defined below) is not satisfied and
has not been waived, to permit such Offer Condition to be satisfied. |
The Merger Agreement provides that we are not required
to extend the Offer beyond the Extension Deadline. The Extension Deadline means the earliest to occur of (x) the valid termination of the Merger Agreement and (y) the End Date, which is June 16, 2015 as
summarized below in Section 11 The Merger Agreement; Other AgreementsTermination of the Merger Agreement. If we extend the Offer, such extension will extend the time that you will have to tender your Shares. See
Section 1 Terms of the Offer.
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How will I be notified if the time period during which I can tender my Shares pursuant to the Offer is
extended?
If we extend the Offer, we will inform the Depositary of that fact and will make a public announcement of the extension no
later than 9:00 A.M., Eastern time, on the next business day after the previously scheduled Expiration Date. See Section 1 Terms of the Offer.
How do I tender my Shares pursuant to the Offer?
To tender your Shares pursuant to the Offer, you must deliver the certificates representing your Shares, together with a properly completed and
duly executed Letter of Transmittal, together with any required signature guarantees (or, in the case of a book-entry transfer of Shares, either such Letter of Transmittal or an Agents Message (as defined in Section 3
Procedures for Accepting the Offer and Tendering SharesValid Tender of Shares) in lieu of such Letter of Transmittal), and any other documents required by the Letter of Transmittal, to the Depositary prior to the Expiration Date.
If your Shares are held in street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee), your Shares can be tendered by such nominee through The Depository Trust Company (DTC). You should contact the
institution that holds your Shares for more details.
If you are unable to deliver any required document or instrument to the Depositary
prior to the Expiration Date, you may gain some extra time by having a broker, a bank or any other fiduciary that is an eligible guarantor institution guarantee that the missing items will be received by the Depositary by using the enclosed notice
of guaranteed delivery (the Notice of Guaranteed Delivery). For the tender to be valid, however, the Depositary must receive the Notice of Guaranteed Delivery prior to the Expiration Date and must then receive the missing items within
three NASDAQ trading days after the date of execution of such Notice of Guaranteed Delivery. See Section 3 Procedures for Accepting the Offer and Tendering SharesGuaranteed Delivery.
See Section 3 Procedures for Accepting the Offer and Tendering Shares.
Until what time may I withdraw previously tendered Shares?
Except as otherwise provided in Section 4 Withdrawal Rights, tenders of Shares made pursuant to the Offer are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after 60 days from the commencement of the
Offer, unless such Shares have already been accepted for payment by us pursuant to the Offer. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct such nominee to
arrange for the withdrawal of your Shares. See Section 4 Withdrawal Rights.
How do I properly withdraw previously
tendered Shares?
To properly withdraw any of your previously tendered Shares, you must deliver a written notice of withdrawal with the
required information (as specified in this Offer to Purchase and in the Letter of Transmittal) to the Depositary while you still have the right to withdraw Shares. If you tendered your Shares by giving instructions to a broker, dealer, commercial
bank, trust company or other nominee, you must instruct such nominee to arrange for the proper withdrawal of your Shares. See Section 4 Withdrawal Rights.
Upon the successful consummation of the Offer, will Shares continue to be publicly traded?
No. Following the consummation of the Offer, we, Parent and Volcano expect to consummate the Merger immediately in accordance with
Section 251(h) of the DGCL, after which the Surviving Corporation will be a wholly owned subsidiary of Parent and the Shares will no longer be publicly traded. Following the
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consummation of the Merger (the Closing), we intend to cause Volcano to be delisted from NASDAQ and deregistered under the Securities Exchange Act of 1934, as amended, and the
regulations thereunder (the Exchange Act). See Section 13 Certain Effects of the Offer.
Will the Offer be
followed by the Merger if all of the Shares are not tendered in the Offer?
Yes. If at least such number of Shares as satisfies the
Minimum Condition are validly tendered and accepted for payment by us in the Offer, and the other conditions to the Merger are satisfied or waived (see Section 11 The Merger Agreement; Other AgreementsThe Merger
AgreementMerger Closing Conditions), then, in accordance with the terms of the Merger Agreement, we will complete the Merger without a vote of Volcanos stockholders pursuant to Section 251(h) of the DGCL. See Section 13
Certain Effects of the Offer.
If you do not consummate the Offer, will you nevertheless consummate the Merger?
No. None of us, Parent or Volcano are under any obligation to pursue or consummate the Merger if the Offer has not been first consummated.
Will there be a subsequent offering period?
No. Pursuant to Section 251(h) of the DGCL and due to the obligations of Parent, us and Volcano under the Merger Agreement, we expect the
Merger to occur on the date of, and immediately following, the Offer Acceptance Time without a subsequent offering period. See Section 1 Terms of the Offer.
If I object to the price being offered, will I have appraisal rights?
Appraisal rights are not available to the holders of Shares in connection with the Offer. However, if the Merger is consummated, the holders of
Shares immediately prior to the Effective Time who (i) did not tender their Shares in the Offer, (ii) follow the procedures set forth in Section 262 of the DGCL and (iii) do not thereafter withdraw their demand for appraisal of
such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court of Chancery and receive payment of the fair value of such Shares,
exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, as determined by such court. The fair value could be higher or lower than, or the same as, the Offer
Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price). See Section 17 Certain Legal Matters; Regulatory ApprovalsAppraisal Rights. Concurrently with the commencement of the
Offer, Volcano is distributing the Schedule 14D-9, which contains important information regarding how a holder of Shares may exercise its appraisal rights.
If I decide not to tender my Shares pursuant to the Offer, how will the Offer affect my Shares?
Subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, we, Parent and Volcano will consummate the
Merger immediately following the Offer Acceptance Time. If the Merger is consummated, then stockholders who did not tender their Shares pursuant to the Offer will receive the same amount of cash per Share that they would have received had they
tendered their Shares pursuant to the Offer (i.e., the Offer Price), subject to any appraisal rights properly exercised by such stockholders in accordance with Delaware law. Therefore, if the Merger takes place, the only difference to you between
tendering your Shares pursuant to the Offer and not tendering your Shares pursuant to the Offer would be that, if you tender your Shares, you may be paid earlier and no appraisal rights will be available. No interest will be paid for Shares acquired
in the Merger. Because the Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger.
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Furthermore, following the Offer, it is possible that the Shares may no longer constitute
margin securities for the purposes of the margin regulations of the Federal Reserve Board, in which event the Shares would be ineligible as collateral for margin loans made by brokers. See Section 13 Certain
Effects of the Offer.
See Section 11 The Merger Agreement; Other Agreements and
Section 13 Certain Effects of the Offer.
What is the market value of my Shares as of a recent date and the
premium I am receiving?
The Offer Price of $18.00 per Share represents an approximate:
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57% premium to the closing price per Share reported on NASDAQ on December 16, 2014, the last full trading day before we announced the execution of the Merger Agreement; and |
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65% premium over the average closing trading prices for the Shares for the 60-day period ending on December 16, 2014. |
On December 29, 2014, the last trading day before we commenced the Offer, the closing price of Shares reported on NASDAQ was $17.87 per
Share.
We encourage you to obtain a recent quotation for Shares in deciding whether to tender your Shares. See
Section 6 Price Range of Shares; Dividends.
If I tender my Shares, when and how will I get paid?
If the conditions to the Offer as set forth in Section 15 Conditions to the Offer are satisfied or waived and we
consummate the Offer and accept your Shares for payment, you will be entitled to promptly (but no later than the first business day after our acceptance of such Shares) receive an amount equal to the number of Shares you tendered pursuant to the
Offer multiplied by the Offer Price, net to you in cash, without interest, less any applicable withholding taxes. We will pay for your validly tendered and not properly withdrawn Shares by depositing the aggregate Offer Price therefor with the
Depositary, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for tendered Shares will be made only after timely receipt by the Depositary of (i) certificates
representing such Shares or a confirmation of a book-entry transfer of such Shares as described in Section 3 Procedures for Accepting the Offer and Tendering SharesBook-Entry Transfer, (ii) a properly
completed and duly executed Letter of Transmittal, together with any required signature guarantees or, in the case of a book-entry transfer of Shares, either such Letter of Transmittal or an Agents Message (as defined in
Section 3 Procedures for Accepting the Offer and Tendering SharesValid Tender of Shares) in lieu of such Letter of Transmittal, and (iii) any other required documents for such Shares. See
Section 1 Terms of the Offer and Section 2 Acceptance for Payment and Payment for Shares.
What will happen to my equity awards in the Offer?
The Offer is being made only for Shares, and not for options to purchase Shares (Volcano Options) or restricted stock units with
respect to Shares (Volcano RSUs) issued pursuant to the Volcano Equity Plans. Holders of outstanding Volcano Options or Volcano RSUs may participate in the Offer only if they first exercise such Volcano Options (to the extent
exercisable) or become vested in such Volcano RSUs which are then settled in Shares in accordance with the terms of the applicable Volcano Equity Plan and other applicable Volcano award agreements and tender the Shares, if any, issued upon such
exercise or in connection with such vesting and settlement. Any such exercise or settlement needs to be completed sufficiently in advance of the Expiration Date to assure that the holder of such outstanding Volcano Options or Volcano RSUs will have
sufficient time to comply with the procedures for tendering Shares described below in Section 3 Procedures for Accepting the Offer and Tendering Shares.
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Each Volcano Option that is outstanding as of immediately prior to the Offer Acceptance Time will
accelerate and become fully vested and exercisable immediately prior to the Offer Acceptance Time. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each Volcano Option that is then
outstanding and unexercised will be cancelled and be converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (i) the total number of Shares subject
to such fully vested Volcano Option immediately prior to the Effective Time and (ii) the excess, if any, of (x) the Offer Price in cash (the Merger Consideration) over (y) the exercise price payable per Share under such
Volcano Option, less any applicable withholding taxes. Each Volcano Option that has an exercise price per Share that is equal to or greater than the Merger Consideration will be cancelled at the Effective Time and will cease to exist without
entitling the holder thereof to receive any payment before or after the Effective Time.
Each Volcano RSU that is outstanding as of
immediately prior to the Offer Acceptance Time will become fully vested immediately prior to the Offer Acceptance Time. In lieu of an issuance of Shares in settlement of such vested Volcano RSUs, as of the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, each Volcano RSU will be cancelled and converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying
(i) the total number of Shares otherwise issuable with regard to such fully vested Volcano RSUs immediately prior to the Effective Time and (ii) the Merger Consideration, less any applicable withholding taxes.
See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementTreatment of Volcano Options and
Volcano RSUs.
What are the U.S. federal income tax consequences of the Offer and the Merger?
The receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal
income tax purposes if you are a United States Holder (as defined in Section 5 Certain Material U.S. Federal Income Tax Consequences of the Offer and the MergerUnited States Holders). In general, you will
recognize gain or loss equal to the difference between your adjusted tax basis in Shares that you tender pursuant to the Offer or exchange in the Merger and the amount of cash you receive for such Shares. If you are a United States Holder and you
hold your Shares as a capital asset, the gain or loss that you recognize will be a capital gain or loss and will be treated as a long-term capital gain or loss if you have held such Shares for more than one year. If you are a Non-United States
Holder (as defined in Section 5 Certain Material U.S. Federal Income Tax Consequences of the Offer and the MergerNon-United States Holders), then except as described below in Section 5 Certain
Material U.S. Federal Income Tax Consequences of the Offer and the MergerNon-United States Holders, you will generally not be subject to U.S. federal income tax on gain recognized on Shares you tender pursuant to the Offer or exchange in
the Merger. You should consult your tax advisor about the particular tax consequences to you of tendering your Shares pursuant to the Offer, exchanging your Shares in the Merger or exercising appraisal rights. See Section 5
Certain Material U.S. Federal Income Tax Consequences of the Offer and the Merger for a discussion of certain material U.S. federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the
Merger.
To whom should I talk if I have additional questions about the Offer?
You may call Georgeson Inc., the Information Agent, toll-free at (866) 856-2826.
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To the Holders of Shares of Common Stock of Volcano Corporation:
INTRODUCTION
The Offer is being made pursuant to the Merger Agreement by and among Parent, Volcano and us. We are offering to purchase all of the issued
and outstanding Shares at the Offer Price, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer.
The Offer and the withdrawal rights will expire at the Expiration Date, unless the Offer is extended or the Merger Agreement has been earlier
terminated in accordance with its terms. Under no circumstances will interest be paid with respect to the purchase of Shares pursuant to the Offer, regardless of any extension of the Offer or any delay in making payment for Shares.
If you are a record owner of Shares and you tender such Shares directly to the Depositary in accordance with the terms of this Offer, we will
not charge you brokerage fees, commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the sale of Shares pursuant to the Offer. However, if you do not complete and sign the Internal Revenue
Service (IRS) Form W-9 that is enclosed with the Letter of Transmittal (or other applicable form), you may be subject to backup withholding at the applicable statutory rate on the gross proceeds payable to you. See
Section 3 Procedures for Accepting the Offer and Tendering SharesBackup Withholding. Stockholders with Shares held in street name by a broker, dealer, bank, trust company or other nominee should consult with such
nominee to determine if they will be charged any service fees or commissions. We will pay all charges and expenses of the Depositary and the Information Agent incurred in connection with the Offer. See Section 18 Fees and
Expenses.
Subject to the provisions of the Merger Agreement, immediately following the Offer Acceptance Time, we, Parent and
Volcano will cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware a certificate of merger (the Certificate of Merger), in accordance with the relevant provisions of the DGCL. The Merger will
become effective upon the filing of the Certificate of Merger or at such later time as Parent, Purchaser and Volcano agree in writing and specify in the Certificate of Merger, at which time Volcano will become the Surviving Corporation and a wholly
owned subsidiary of Parent. At the Effective Time, each Share then outstanding (other than Shares that are held by any stockholders who properly demand appraisal in connection with the Merger as described in Section 17 Certain
Legal Matters; Regulatory ApprovalsAppraisal Rights) will be converted into the right to receive the Offer Price, without interest, less any applicable withholding taxes, except for Shares then owned by Parent, Purchaser or any other
wholly owned subsidiary of Parent and Shares held by Volcano or any of its wholly owned subsidiaries, which Shares will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.
Section 11 The Merger Agreement; Other Agreements more fully describes the Merger Agreement. Certain material
U.S. federal income tax consequences of the sale of Shares pursuant to the Offer and the exchange of Shares pursuant to the Merger are described in Section 5 Certain Material U.S. Federal Income Tax Consequences of
the Offer and the Merger.
After careful consideration, the Volcano Board has unanimously (i) determined that the Merger
Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the Merger will be subject to Section 251(h) of the
DGCL; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the
stockholders of Volcano tender their Shares to Purchaser pursuant to the Offer.
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A more complete description of the Volcano Boards reasons for authorizing and approving the
Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is set forth in the Schedule 14D-9 that is being filed with the SEC and, together with this Offer to Purchase, the Letter of Transmittal and other
related materials, mailed to Volcanos stockholders in connection with the Offer. Stockholders should carefully read the information set forth in the Schedule 14D-9 in its entirety.
The Offer is not subject to any financing condition.
The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the satisfaction or waiver by us and Parent
of the Antitrust Condition and the other customary conditions described in Section 15 Conditions to the Offer.
According to Volcano, as of December 15, 2014, there were (a) 51,610,342 issued and outstanding Shares, (b) 2,798,233 Shares subject to
issuance pursuant to Volcano Options, (c) 87,525 Shares estimated to be subject to outstanding purchase rights under Volcanos 2007 Employee Stock Purchase Plan (the ESPP) (assuming that the closing price per Share as reported
on the purchase date for the current offering period was equal to the Offer Price), (d) 1,033,139 Shares subject to or otherwise deliverable in connection with outstanding Volcano RSUs and (e) 14,855,100 Shares subject to issuance pursuant to
warrants to purchase Shares (without giving effect to any make-whole adjustment with respect to such warrants). Based upon the foregoing and assuming that (i) no other Shares were or are issued after December 15, 2014 and (ii) no Volcano
Options, Volcano RSUs or other equity-based awards denominated in Shares have been granted or have expired after December 15, 2014, the Minimum Condition would be satisfied if at least (A) 25,805,172 Shares, assuming Volcano did not and does not
receive notices of exercise with respect to any Volcano Options or Volcano Warrants prior to the expiration of the Offer, or (B) 35,192,170 Shares, assuming Volcano received notices of exercise with respect to all Volcano Options and Volcano
Warrants prior to the expiration of the Offer, are validly tendered and not properly withdrawn prior to the Expiration Date. The actual number and percentage of outstanding Shares that are required to be tendered to satisfy the Minimum Condition
will depend on the actual number of Shares outstanding at the Expiration Date. The terms of the Volcano Equity Plans provide for a net exercise feature with respect to certain nonstatutory stock options, and to the extent the holders of
such Volcano Options choose to net exercise such awards, fewer than 2,798,233 Shares would be issued by Volcano in respect of the Volcano Options prior to the Expiration Date and the number of Shares necessary to satisfy the Minimum Condition would
be adjusted accordingly. In addition, because the exercise price for the warrants to purchase Shares and approximately 63% of the Volcano Options is greater than the Offer Price, we would not expect such warrants and Volcano Options to be exercised.
The Merger will be governed by Section 251(h) of the DGCL. Accordingly, subject to the satisfaction or waiver of the remaining
conditions set forth in the Merger Agreement, Parent, we and Volcano will cause the Merger to become effective immediately following the Offer Acceptance Time without a meeting of stockholders of Volcano in accordance with Section 251(h) of the
DGCL. See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementApplication of Section 251(h) of the DGCL. At the Effective Time, our directors immediately prior to the Effective Time will
be the only directors of the Surviving Corporation.
Appraisal rights are not available to the holders of Shares in connection with the
Offer. However, if the Merger is consummated, the holders of Shares immediately prior to the Effective Time who (i) did not tender their Shares in the Offer, (ii) follow the procedures set forth in Section 262 of the DGCL and
(iii) do not thereafter withdraw their demand for appraisal of such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court of Chancery and
receive payment of the fair value of such Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, as determined by such court. The fair
value could be higher or lower than, or the same as, the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer Price). See Section 17 Certain Legal Matters; Regulatory
ApprovalsAppraisal Rights.
This Offer to Purchase and the Letter of Transmittal contain important information that should
be read carefully before any decision is made with respect to the Offer.
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THE TENDER OFFER
Upon the terms and subject to the conditions to the Offer
(including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), as soon as practicable after the Expiration Date (but no later than 9:00 A.M., Eastern Time, on the first business day after the Expiration
Date), Purchaser shall (and Parent shall cause Purchaser to) accept for payment and promptly thereafter (but no later than the first business day after the Expiration Date) pay for all Shares validly tendered and not properly withdrawn prior to the
Expiration Date as permitted under Section 4 Withdrawal Rights.
The Offer is not subject to any financing
condition. The Offer is conditioned upon the satisfaction of the Minimum Condition, the satisfaction or waiver by us and Parent of the Antitrust Condition and the other customary conditions described in Section 15
Conditions to the Offer.
We and Parent expressly reserve the right from time to time to waive any of the conditions described
in Section 15 Conditions to the Offer to increase the Offer Price or to make any other changes in the terms and conditions of the Offer, except that neither we nor Parent will, without the prior written consent of
Volcano, (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer, (iii) decrease the maximum number of Shares sought to be purchased in the Offer, (iv) impose conditions to the Offer in addition
to the Offer Conditions, (v) amend or modify any of the Offer Conditions in a manner that adversely affects holders of Shares generally, (vi) change the Minimum Condition, (vii) extend or otherwise change the Expiration Date in a
manner other than as required or permitted by the Merger Agreement or (viii) provide any subsequent offering period within the meaning of Rule 14d-11 promulgated under the Exchange Act.
There will not be a subsequent offering period for the Offer. Pursuant to the Merger Agreement, subject to the satisfaction or waiver of the
remaining conditions set forth in the Merger Agreement, we, Parent and Volcano will take all necessary and appropriate action to cause the Merger to become effective immediately following the Offer Acceptance Time. Because the Merger will be
governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger. We do not expect there to be a significant period of time between the consummation of the Offer and the Closing.
The Merger Agreement separately provides that we are required to extend the Offer beyond the initial Expiration Date. If the conditions to the
Offer have not been satisfied or waived (other than the Minimum Condition, which we and Parent may not waive) and the Merger Agreement has not been terminated, Volcano may require us to extend the Offer on one or more occasions, for an additional
period of up to ten business days per extension, until all conditions to the Offer have been satisfied or waived (other than the Minimum Condition, which we and Parent may not waive). In addition, we will extend the Offer either (i) for the
minimum period required by any legal requirement, interpretation or position of the Securities and Exchange Commission or its staff or NASDAQ or its staff or (ii) for periods of up to ten business days per extension until any waiting period
(and any extension thereof) applicable to the consummation of the Offer under the HSR Act and any foreign antitrust or competition-related legal requirement has expired or been terminated. The Merger Agreement provides that we are not required to
extend the Offer beyond the Extension Deadline, as summarized below in Section 11 The Merger Agreement; Other AgreementsTermination of the Merger Agreement. For purposes of the Offer, as provided under the Exchange
Act, a business day means any day other than a Saturday, Sunday or a U.S. federal holiday and consists of the time period from 12:01 A.M. through 12:00 midnight, Eastern time.
If we extend the Offer, are delayed in our acceptance for payment of Shares, are delayed in payment after the time we accept, for the first
time, for payment Shares validly tendered and not properly withdrawn pursuant to the Offer (the Offer Acceptance Time) or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights
under the Offer, the Depositary may retain tendered Shares on
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our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in this Offer to Purchase under
Section 4 Withdrawal Rights. However, our ability to delay the payment for Shares that we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires us to promptly pay the consideration
offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.
If
we make a material change in the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by
Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act and the interpretations thereunder. The minimum period during which an offer must remain open following material changes in the terms of an offer or information concerning an offer,
other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes and the appropriate manner of dissemination. In a
published release, the SEC has stated that, in its view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and that if material changes are made with
respect to information that approaches the significance of price and the percentage of securities sought, a minimum period of ten business days may be required to allow for adequate dissemination to stockholders and investor response. In accordance
with the foregoing view of the SEC and the applicable law, if, prior to the Expiration Date, and subject to the limitations of the Merger Agreement, we change the number of Shares being sought or the consideration offered pursuant to the Offer, and
if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such change is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such
tenth business day.
If, prior to the Expiration Date, we increase the consideration being paid for Shares, such increased
consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of such increase in consideration.
Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement
thereof, such announcement in the case of an extension to be made no later than 9:00 A.M., Eastern time, on the next business day after the previously scheduled Expiration Date. Subject to applicable law (including Rules 14d-4(d), 14d-6(c)
and 14e-1 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 we may choose to make any public
announcement, we will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service.
Volcano has provided us with Volcanos stockholder list and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Volcanos stockholder list and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies and other nominees whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security
position listing.
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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), as soon as practicable after the Expiration Date (but no later than 9:00 A.M., Eastern Time, on the first business
day after the Expiration Date), Purchaser shall (and Parent shall cause Purchaser to) accept for payment and promptly thereafter (but no later than the first business day after the Expiration Date) pay for all Shares validly tendered and not
properly withdrawn prior to the Expiration Date pursuant to the Offer.
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In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of:
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for Shares held as physical certificates, the certificates evidencing such Shares (Share Certificates) or, for Shares held in book-entry form, confirmation of a book-entry transfer of such Shares (a
Book-Entry Confirmation) into the Depositarys account at DTC, in each case pursuant to the procedures set forth in Section 3 Procedures for Accepting the Offer and Tendering Shares; |
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a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, or, in the case of a book-entry transfer of Shares, either such Letter of Transmittal or an Agents
Message in lieu of such Letter of Transmittal; and |
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any other documents required by the Letter of Transmittal. |
Accordingly, tendering
stockholders may be paid at different times depending upon when the above referenced items (including Share Certificates or Book-Entry Confirmations with respect to tendered Shares) are actually received by the Depositary.
For purposes of the Offer, we will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn, if and when we give oral or written notice to the Depositary of our acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions to the Offer, payment for Shares accepted for payment pursuant
to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from us and transmitting such payments to tendering stockholders of record
whose Shares have been accepted for payment. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or we are unable to accept for payment Shares tendered pursuant to the Offer, then, without
prejudice to our rights under the Offer, the Depositary may, nevertheless, on our behalf, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as
described in Section 4 Withdrawal Rights and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest with respect to the Shares purchased pursuant to the Offer be paid, regardless of any extension of the
Offer or delay in making such payment.
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 us in our sole discretion. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of which may, in the
opinion of our counsel, be unlawful.
Shares tendered by a Notice of Guaranteed Delivery will not be deemed validly tendered for
purposes of satisfying the Minimum Condition unless and until Shares underlying such Notice of Guaranteed Delivery are delivered to the Depositary.
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 or untendered Shares will be returned, without expense, to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into
the Depositarys account at DTC pursuant to the procedure set forth in Section 3 Procedures for Accepting the Offer and Tendering Shares, such Shares will be credited to an account maintained at DTC), in each case,
promptly following the expiration or termination of the Offer.
We reserve the right to transfer or assign in whole or in part from time
to time to Parent or one or more affiliates of Parent or us the right to purchase all or any Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve us of our obligations under the Offer and will in no way
prejudice your rights to receive payment for Shares validly tendered and not withdrawn pursuant to the Offer.
5
3. |
Procedures for Accepting the Offer and Tendering Shares. |
Valid Tender of
Shares. No alternative, conditional or contingent tenders will be accepted. In order for a Volcano stockholder to validly tender Shares pursuant to the Offer, the stockholder must follow one of the following procedures:
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for Shares held as physical certificates, the Share Certificates, a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, 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 before the Expiration Date; |
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for Shares held in book-entry form, either a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, or an Agents Message in lieu of such Letter of Transmittal,
and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, and such Shares must be delivered according to the book-entry transfer procedures described below
under Book-Entry Transfer and a Book-Entry Confirmation must be received by the Depositary, in each case before the Expiration Date; or |
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for Shares tendered by a Notice of Guaranteed Delivery, the tendering stockholder must comply with the guaranteed delivery procedures described below under Guaranteed Delivery before the Expiration Date.
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The term Agents Message means a message transmitted by DTC to, and received by, the Depositary and
forming a part of a Book-Entry Confirmation that states that DTC has received an express acknowledgment from the participant in DTCs systems tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce such agreement against such participant.
Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at DTC for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial institution that is a participant in DTCs systems may make a book-entry delivery of Shares by causing DTC to transfer such Shares into the Depositarys account at
DTC in accordance with DTCs procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, a properly completed and duly executed Letter of Transmittal, together with any required
signature guarantees, or, in the case of a book-entry transfer, either such Letter of Transmittal or an Agents Message in lieu of such Letter of Transmittal, and any other required documents (for example, in certain circumstances, a completed
IRS Form W-9 that is included in the Letter of Transmittal) 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 DTC does not constitute delivery to the Depositary.
Signature Guarantees. No signature guarantee is required on the Letter of Transmittal if:
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the Letter of Transmittal is signed by the registered holder (which term, for purposes of this Section 3, includes any participant in DTCs systems whose name appears on a security position listing as the
owner of the Shares) of the Shares tendered therewith, unless such registered holder has completed either the box entitled Special Delivery Instructions or the box entitled Special Payment Instructions on the Letter of
Transmittal; or |
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Shares tendered pursuant to such Letter of Transmittal are for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of or
participant in a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock
Exchange Medallion Signature Program (MSP), or any other eligible guarantor institution, as such term is defined in Rule 17Ad-15 under the Exchange Act (each, an Eligible Institution). |
6
In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signatory of the Letter of Transmittal, or if payment is to be made or delivered to, or a
Share Certificate not accepted for payment or not tendered is to be issued in the name of or returned to, a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock
powers, in either case signed exactly as the name(s) of the registered holder(s) appears on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of
Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to
tender Shares pursuant to the Offer and the Share Certificates evidencing such stockholders 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 of the following conditions are satisfied:
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such tender is made by or through an Eligible Institution; |
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a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by us, is received prior to the Expiration Date by the Depositary as provided below; and
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the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with a properly completed and duly executed Letter of Transmittal, together with
any required signature guarantees, or, in the case of book-entry transfers of Shares, either such Letter of Transmittal or an Agents Message in lieu of such Letter of Transmittal, and any other documents required by the Letter of Transmittal
are received by the Depositary within three NASDAQ trading days after the date of execution of such Notice of Guaranteed Delivery. |
A Notice of Guaranteed Delivery may be delivered by overnight courier or mailed 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 us. In the case of Shares held through DTC, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant by means of the
confirmation system of DTC.
Shares tendered by a Notice of Guaranteed Delivery will not be deemed validly tendered for purposes of
satisfying the Minimum Condition unless and until Shares underlying such Notice of Guaranteed Delivery are delivered to the Depositary.
The method of delivery of Shares, the Letter of Transmittal and all other required documents, including delivery through DTC, is at the
election and risk of the tendering stockholder. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, then registered mail
with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholders acceptance of the
terms and conditions of the Offer, as well as the tendering stockholders representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal,
and that when the Offer Acceptance Time occurs, we will acquire good and unencumbered title, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. Our acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Offer.
7
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 us in our sole discretion. We reserve the absolute right to reject any and all tenders we determine not to be in proper form or the acceptance for
payment of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive 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 to our satisfaction. None of us, 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. Our interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be determined by us in our sole discretion.
Appointment as Proxy. By executing
the Letter of Transmittal (or, in the case of a book-entry transfer, by delivery of an Agents Message in lieu of a Letter of Transmittal) as set forth above, unless Shares relating to such Letter of Transmittal or Agents Message are
properly withdrawn pursuant to the Offer, the tendering stockholder will irrevocably appoint our designees, and each of them, as such stockholders attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with
full power of substitution, to the full extent of such stockholders rights with respect to the Shares tendered by such stockholder and accepted for payment by us and with respect to any and all other Shares or other securities or rights issued
or issuable in respect of such Shares. All such proxies will be considered coupled with an interest in the tendered Shares. Such appointment will be effective if and when, and only to the extent that, we accept such Shares for payment pursuant to
the Offer. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective) with respect thereto. Each of our designees will thereby be empowered to exercise all voting and other rights with respect to such Shares
and other securities or rights, including in respect of any annual, special or adjourned meeting of Volcanos stockholders or otherwise, as such designee in its sole discretion deems proper. We reserve the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the occurrence of the Offer Acceptance Time, we must be able to exercise full voting, consent and other rights with respect to such Shares and other securities and rights, including voting at
any meeting of stockholders.
The foregoing powers of attorney and proxies are effective only upon acceptance for payment of Shares
pursuant to the Offer. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of Volcanos stockholders.
Volcano Options and Volcano RSUs. The Offer is made only for outstanding Shares and is not made for any Volcano Options or Volcano
RSUs. See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementTreatment of Volcano Options and Volcano RSUs for a description of the treatment of the Volcano Options and Volcano RSUs.
Backup Withholding. To prevent U.S. federal backup withholding with respect to payment of the Offer Price or Shares
purchased pursuant to the Offer, each stockholder (including any stockholder that tenders Shares pursuant to the Offer pursuant to the book-entry transfer procedures described above in this Section 3) should provide the Depositary with its
correct taxpayer identification number and certify that it is not subject to backup withholding by completing the IRS Form W-9 that is included in the Letter of Transmittal or by otherwise furnishing other applicable documentation certifying
such stockholders exemption from backup withholding. See Instruction 8 set forth in the Letter of Transmittal and Section 5 Certain Material U.S. Federal Income Tax Consequences of the Offer and the
Merger of this Offer to Purchase for a more detailed discussion of backup withholding.
8
Except as otherwise provided in this Section 4, tenders of
Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after 60 days
from the commencement of the Offer, unless such Shares have already been accepted for payment by us pursuant to the Offer.
For a
withdrawal to be proper and effective, a written 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 Procedures for Accepting the Offer and Tendering SharesBook-Entry Transfer, any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the
withdrawn Shares.
If we extend the Offer, are delayed in our acceptance for payment of Shares or are unable to accept Shares for payment
pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, nevertheless, on our behalf, 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 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Withdrawals of tendered Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not to have been validly
tendered for purposes of the Offer. However, Shares that have been properly withdrawn may be re-tendered at any time prior to the Expiration Date by following one of the procedures described in Section 3 Procedures for
Accepting the Offer and Tendering SharesValid Tender of Shares.
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by us in our sole discretion. We also reserve the absolute right to waive any defect or irregularity in the withdrawal of Shares by any stockholder, regardless of whether or not similar defects
or irregularities are waived in the case of other stockholders. None of us, 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.
5. |
Certain Material U.S. Federal Income Tax Consequences of the Offer and the Merger. |
The
following is a summary of certain material U.S. federal income tax consequences of the Offer and the Merger to holders whose Shares are purchased pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger.
This summary is based on the Internal Revenue Code of 1986, as amended, applicable treasury regulations and administrative and judicial interpretations thereunder, each as in effect as of the date hereof, all of which may change, possibly with
retroactive effect. This summary is not a comprehensive description of all U.S. federal income tax considerations that may be relevant to the Offer and the Merger. This summary does not apply to any right to purchase capital stock of Volcano
and does not apply to holders who receive cash pursuant to the exercise of appraisal rights. This summary applies only to holders that hold their Shares as capital assets for U.S. federal income tax purposes (generally, property held for
investment), and may not apply to Shares received pursuant to the exercise of employee stock options, pursuant to restricted stock units or otherwise as compensation, Shares held as qualified small business stock or Section 1244
stock, Shares
9
held as part of a straddle, hedge, conversion transaction, constructive sale or other integrated transaction, holders that purchase or sell Shares as part of a
wash sale for tax purposes, holders in special tax situations (including, but not limited to, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, banks,
insurance companies, tax-exempt organizations, U.S. expatriates, controlled foreign corporations or passive foreign investment companies), or United States Holders (as defined below) whose functional currency is not the
U.S. dollar. This discussion does not address any aspect of the U.S. alternative minimum or Medicare taxes, federal gift or estate tax, or state, local or foreign taxation.
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a partner
in the partnership generally will depend on the status of the partner and the tax treatment of the partnership. Accordingly, partnerships that hold Shares and partners in such partnerships should consult their tax advisors with regard to the
U.S. federal income tax consequences of exchanging Shares pursuant to the Offer or the Merger.
This discussion does not address the
tax consequences of acquisitions or dispositions of Company Shares outside the Offer or the Merger, or transactions pertaining to Volcano Options or Volcano RSUs that are cancelled and converted into the right to receive cash, as the case may be, in
connection with the Merger.
THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE BASED ON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER SHOULD CONSULT SUCH HOLDERS OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH HOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER TO SUCH HOLDER,
INCLUDING THE APPLICATION AND EFFECT OF U.S. FEDERAL ESTATE AND GIFT, STATE, LOCAL AND OTHER TAX LAWS.
United States
Holders. For purposes of this discussion, the term United States Holder means a beneficial owner of Shares that is, for U.S. federal income tax purposes:
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a citizen or resident of the United States; |
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a domestic corporation; |
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an estate whose income is subject to United States federal income taxation regardless of its source; or |
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a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial
decisions of the trust or (ii) the trust has validly elected to be treated as a United States person under applicable Treasury regulations. |
The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes. In
general, a United States Holder will recognize gain or loss in an amount equal to the difference between such United States Holders adjusted federal income tax basis in such Shares sold pursuant to the Offer or converted into the right to
receive cash in the Merger and the amount of cash received therefor. Gain or loss must be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) sold pursuant to the Offer or converted into
the right to receive cash in the Merger. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if, on the date of sale (or, if applicable, the date of the Merger), such Shares were held for more than one year.
Long-term capital gains recognized by an individual generally will be taxed at preferential rates. Net capital losses may be subject to limits on deductibility.
Non-United States Holders. For purposes of this discussion, the term Non-United States Holder means a beneficial owner
of Shares that is not a United States person for U.S. Federal income tax purposes.
In general, a Non-United States Holder will not
be subject to U.S. federal income tax on gain recognized on Shares sold pursuant to the Offer or converted into the right to receive cash in the Merger unless:
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the gain is effectively connected with the Non-United States Holders conduct of a trade or business in the United States (and if required by an applicable income tax treaty as a condition for
subjecting such holder to U.S. taxation on a net income basis, the gain is attributable to a permanent establishment that such holder maintains in the United States); |
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the Non-United States Holder is an individual present in the United States for 183 or more days in the taxable year of the sale and certain other conditions exist; or |
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Volcano is or has been a United States real property holding corporation for U.S. federal income tax purposes at any time within the shorter of the five-year period ending on the date of sale (or, if applicable,
the date of the Merger) or the Non-United States Holders holding period. |
Effectively connected gains that
are recognized by a Non-United States Holder that is treated as a corporation for U.S. federal income tax purposes also may be subject, under certain circumstances, to an additional branch profits tax at a 30% rate or at a lower rate if
such holder is eligible for the benefits of an income tax treaty that provides for a lower rate.
In general, Volcano would be a United
States real property holding corporation if interests in U.S. real estate comprised (by fair market value) at least half of Volcanos total worldwide interests in real property plus Volcanos business assets. Volcano believes that it is
not, and does not anticipate becoming, a United States real property holding corporation before the date of sale (or, if applicable, the date of the Merger) for U.S. federal income tax purposes. Even if Volcano were treated as a United States
real property holding corporation, such treatment will not cause gain realized by a Non-United States Holder on a disposition of Shares to be subject to U.S. federal income tax so long as (1) the Non-United States Holder owned, directly, indirectly
and constructively, no more than 5% of Volcanos common stock at all times within the shorter of (i) the five-year period preceding the disposition or (ii) the Non-United States Holders holding period and (2) the Shares are regularly
traded on an established securities market.
Information Reporting and Backup Withholding. Payments made to a non-corporate
United States Holder in connection with the Offer or the Merger generally will be subject to information reporting and may be subject to backup withholding. See Section 3 Procedures for Accepting the Offer and
Tendering SharesBackup Withholding of this Offer to Purchase.
Backup withholding generally applies if a United States Holder
(i) fails to provide an accurate taxpayer identification number or (ii) in certain circumstances, fails to comply with applicable certification requirements. A Non-United States Holder generally will be exempt from information reporting
and backup withholding if it certifies on an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable form) that it is not a United States person, or otherwise establishes an exemption in a manner satisfactory to the Depositary.
Backup withholding is not an additional tax and may be refunded by the IRS to the extent it results in an overpayment of tax. Certain persons
generally are entitled to exemption from information reporting and backup withholding, including corporations. Certain penalties apply for failure to provide correct information and for failure to include reportable payments in income. Each holder
should consult with his or her own tax advisor as to his or her qualification for exemption from backup withholding and the procedure for obtaining such exemption. Tendering United States Holders may be able to prevent backup withholding by
completing the IRS Form W-9 that is included in the Letter of Transmittal or, in the case of Non-United States Holders, an IRS Form W-8BEN or IRS Form W-8BEN-E (or other documentation upon which a payor may rely to treat the payment as
made to a Non-United States Holder).
6. |
Price Range of Shares; Dividends. |
The Shares are listed and principally traded on
NASDAQ under the symbol VOLC. The Shares have been listed on NASDAQ since June 15, 2006.
The following table sets forth,
for the calendar quarters indicated, the high and low sales prices per Share on NASDAQ as reported on NASDAQ:
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High |
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Low |
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Year Ended December 31, 2012: |
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First Quarter |
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$ |
29.91 |
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$ |
21.98 |
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Second Quarter |
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$ |
29.95 |
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$ |
25.12 |
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Third Quarter |
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$ |
30.59 |
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$ |
25.01 |
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Fourth Quarter |
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$ |
30.15 |
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$ |
23.08 |
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High |
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Low |
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Year Ended December 31, 2013: |
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First Quarter |
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$ |
26.23 |
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$ |
20.76 |
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Second Quarter |
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$ |
22.59 |
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$ |
16.37 |
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Third Quarter |
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$ |
24.57 |
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$ |
17.75 |
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Fourth Quarter |
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$ |
24.48 |
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$ |
18.75 |
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Year Ended December 31, 2014: |
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First Quarter |
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$ |
24.62 |
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$ |
19.27 |
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Second Quarter |
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$ |
20.74 |
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$ |
16.54 |
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Third Quarter |
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$ |
18.17 |
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$ |
10.63 |
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Fourth Quarter (through December 29) |
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$ |
17.97 |
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$ |
9.81 |
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According to Volcano, as of December 15, 2014, there were (a) 51,610,342 issued and outstanding
Shares, (b) 2,798,233 Shares subject to issuance pursuant to Volcano Options, (c) 87,525 Shares estimated to be subject to outstanding purchase rights under the Volcano employee stock purchase plan (assuming that the closing price per Share as
reported on the purchase date for the current offering period was equal to the Offer Price), (d) 1,033,139 Shares subject to or otherwise deliverable in connection with outstanding Volcano RSUs and (e) 14,855,100 Shares subject to issuance
pursuant to outstanding warrants to purchase Shares (without giving effect to any make-whole adjustment with respect to such warrants).
The Offer Price of $18.00 per Share represents an approximate:
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57% premium to the closing price per Share reported on NASDAQ on December 16, 2014, the last full trading day before we announced the execution of the Merger Agreement; and |
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65% premium over the average closing trading prices for the Shares for the 60-day period ending on December 16, 2014. |
On December 29, 2014, the last trading day before we commenced the Offer, the closing price of Shares reported on NASDAQ was $17.87 per
Share.
We encourage you to obtain a recent quotation for Shares before deciding whether to tender your Shares.
Volcano has never declared or paid cash dividends with respect to the Shares. Under the terms of the Merger Agreement, Volcano is not
permitted to declare or pay any dividend in respect of the Shares without Parents prior written consent. See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementConduct of Business of
Volcano.
7. |
Certain Information Concerning Volcano. |
Except as otherwise set forth in this Offer to
Purchase, the information concerning Volcano contained in this Offer to Purchase has been taken from or based upon publicly available documents and records on file with the SEC and other public sources and is qualified in its entirety by reference
thereto. None of us, Parent or the Information Agent take responsibility for the accuracy or completeness of the information contained in such documents and records or for any failure by Volcano to disclose events that may have occurred or may
affect the significance or accuracy of any such information but that are unknown to us, Parent and the Information Agent.
General.
Volcano was incorporated in the State of Delaware on January 12, 2000. The principal executive offices are located at 3721 Valley Centre Drive, Suite 500, San Diego, California, 92130 and the telephone number is (800) 228-4728.
Volcano designs, develops, manufactures and commercializes a broad suite of precision guided therapy tools including intravascular ultrasound,
or IVUS, and fractional flow reserve, or FFR, products. Volcano believes that these products enhance the diagnosis and treatment of coronary and peripheral vascular disease by
12
improving the efficiency and efficacy of existing diagnostic angiograms and percutaneous coronary interventional, or PCI, and endovascular procedures in the coronary arteries or peripheral
arteries and veins. Volcano is facilitating the adoption of functional PCI, in which its FFR technology is used to help determine whether or not a stent is necessary, and IVUS is used as an adjunct to angiography to guide stent placement and
optimization. Volcano markets its products to physicians, nurses and technicians who perform a variety of endovascular based coronary and peripheral interventional procedures in hospitals and to other personnel who make purchasing decisions on
behalf of hospitals.
Available Information. Volcano files annual, quarterly and current reports, proxy statements and other
information with the SEC. Volcanos SEC filings are available to the public over the Internet at the SECs website at www.sec.gov. You may also read and copy any document Volcano files with the SEC at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Volcano maintains a website at www.volcanocorp.com. These website addresses are not intended to
function as hyperlinks, and the information contained on Volcanos website and on the SECs website is not incorporated by reference in this Offer to Purchase and you should not consider it a part of this Offer to Purchase.
8. |
Certain Information Concerning Purchaser, Parent and Royal Philips. |
Purchaser. We are a Delaware corporation and a wholly owned subsidiary of Parent and were formed solely for the purpose of engaging
in the transactions contemplated by the Merger Agreement, including the Offer and the Merger. To date, we have not carried on any activities other than those related to our formation, the Merger Agreement, the Offer and the Merger. We have minimal
assets and liabilities other than the contractual rights and obligations as set forth in the Merger Agreement. Following the Offer Acceptance Time and the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, we will
immediately merge with and into Volcano, with Volcano continuing as the Surviving Corporation. Our principal executive offices are located at 3000 Minuteman Road, Andover, Massachusetts 01810. The telephone number at such office is
(978) 687-1501.
Parent. Parent is a Delaware corporation whose primary activities relate to integrated manufacturing and
marketing of products imported from Royal Philips and its affiliates to third parties. The principal executive offices of Parent are located at 3000 Minuteman Road, Andover, Massachusetts 01810. The telephone number at such office is
(978) 687-1501.
Royal Philips. Koninklijke Philips N.V., or Royal Philips, is a corporation organized under the laws of
the Netherlands. The business address of Royal Philips is Breitner Center, Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The business telephone number for Royal Philips is +31 20 59 77232. Royal Philips is a diversified health and well-being
company, focused on improving peoples lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Royal Philips posted 2013 sales of EUR 23.3 billion and employs
approximately 115,000 employees with sales and services in more than 100 countries. Royal Philips is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving
and grooming and oral healthcare.
The name, citizenship, business address, business telephone number, current principal occupation
(including the name, principal business and address of the organization in which such occupation is conducted), and material positions held during the past five years (including the name, principal business and address of the organization in which
such occupation was conducted), of each of the directors and executive officers of Purchaser, Parent and Royal Philips are set forth in Annex A of this Offer to Purchase.
We refer to Purchaser, Parent, Royal Philips and their respective subsidiaries and affiliates, collectively, as Philips.
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Except as set forth elsewhere in this Offer to Purchase (including Section 10
Background of the Offer; Past Contacts, Transactions, Negotiations and Agreements with Volcano, Section 11 The Merger Agreement; Other Agreements, and Annex A): (i) none of Purchaser, Parent, Royal
Philips or, to our knowledge or the knowledge of Parent and Royal Philips after reasonable inquiry, any of the persons or entities listed in Annex A, or any associate or affiliate of the foregoing, beneficially owns or has a right to acquire
any Shares or any other equity securities of Volcano, (ii) none of Purchaser, Parent, Royal Philips or, to our knowledge or the knowledge of Parent and Royal Philips after reasonable inquiry, any of the persons or entities referred to in
clause (i) has effected any transaction in the Shares or any other equity securities of Volcano during the 60-day period preceding the date of this Offer to Purchase, (iii) none of Purchaser, Parent, Royal Philips or, to our knowledge or
the knowledge of Parent and Royal Philips after reasonable inquiry, any of the persons listed on Annex A, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Volcano,
(iv) during the two years prior to the date of this Offer to Purchase, there have been no transactions between us, Parent and Royal Philips, their respective subsidiaries or, to our knowledge or the knowledge of Parent and Royal Philips after
reasonable inquiry, any of the persons listed in Annex A, on the one hand, and Volcano or any of its executive officers, directors or affiliates, on the other hand, (v) during the two years prior to the date of this Offer to Purchase,
there have been no negotiations, transactions or contracts between us, Parent and Royal Philips, our or their respective subsidiaries or, to our knowledge or the knowledge of Parent and Royal Philips after reasonable inquiry, any of the persons
listed in Annex A, on the one hand, and Volcano or any of its executive officers, directors or affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets, (vi) there are no present or proposed material agreements, arrangements, understandings or relationships between us, Parent and Royal Philips or any of our or their
respective executive officers, directors or affiliates, on the one hand, and Volcano or any of its executive officers, directors or affiliates, on the other hand, and (vii) during the past five years, none of us, Parent or Royal Philips, to our
knowledge or the knowledge of Parent and Royal Philips after reasonable inquiry, any of the persons or entities listed in Annex A, has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or been a
party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining it from future violations of, or prohibiting activities subject
to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws.
Available
Information. Pursuant to Rule 14d-3 under the Exchange Act, we, Parent and Royal Philips have filed with the SEC a Tender Offer Statement on Schedule TO (as amended, which we refer to as the Schedule TO), of which
this Offer to Purchase forms a part, and exhibits to the Schedule TO and such documents are available to the public over the Internet at the SECs website at www.sec.gov. You may also read and copy any document filed by us and/or
Parent and/or Royal Philips with the SEC at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Royal Philips maintains
a website at www.philips.com. These website addresses are not intended to function as hyperlinks, and the information contained on Royal Philips website and on the SECs website is not incorporated by reference in this Offer to
Purchase and you should not consider it a part of this Offer to Purchase.
9. |
Source and Amount of Funds. |
The offer is not subject to any financing condition.
Because Royal Philips has guaranteed the performance by us of our obligations under the Merger Agreement, including our payment obligations with respect to the Offer and the Merger, we believe that the business, financial condition and results of
Parent and Purchaser are not material to a decision by a holder of the Shares whether to sell, hold or tender their Shares into the offer. Royal Philips will provide us with sufficient funds to purchase all Shares validly tendered in the Offer and
will provide funding for our acquisition of the remaining Shares in the Merger. Royal Philips expects to fund such cash requirements from its available cash on hand and a new bridge financing entered into for the purpose of financing the
acquisition.
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We estimate that the total amount of funds required to purchase all of the outstanding Shares
pursuant to the offer and to pay related fees and expenses will be approximately $978 million.
10. |
Background of the Offer; Past Contacts, Transactions, Negotiations and Agreements with Volcano. |
Philips regularly evaluates its business and plans and considers a variety of transactions to enhance its business. As part of this process,
Philips has considered a number of alternatives for developing its healthcare and medical systems businesses, including acquisitions of other companies and businesses.
In March 2007, Philips and Volcano entered into a research agreement to ensure the compatibility of Volcano IVUS systems with Philips
Allura Xper FD series of cathlab systems. Since 2008, Philips has also resold certain Volcano consoles with Philips equipment in certain markets.
On June 12, 2014, representatives of Goldman, Sachs & Co. (Goldman Sachs), financial advisor to Volcano, had a discussion with
certain members of management of Philips regarding Volcano.
On June 18, 2014, Philips contacted representatives of Lazard
Frères & Co. LLC (Lazard) to assist Philips in its evaluation of a potential transaction involving Volcano.
On
June 19, 2014, Volcano delivered to Philips a draft confidentiality agreement which contained customary restrictions on the ability of Philips to take certain actions with respect to Volcano. Following the delivery of the draft confidentiality
agreement by Volcano to Philips, members of Volcano and Philips negotiated the terms of the draft confidentiality agreement, and on June 23, 2014, Volcano and Philips executed the confidentiality agreement.
On June 25, 2014, representatives of Lazard and Goldman Sachs held a telephone call to discuss Volcanos process regarding a potential
business combination and the timeline for such process, and to schedule a presentation by the management of Volcano to representatives of Philips.
On June 30, 2014, representatives of Philips and Lazard met with members of management of Volcano and representatives of Goldman Sachs in San
Diego. At such meeting members of management of Volcano and representatives of Goldman Sachs made a presentation regarding Volcanos financial performance and current and future business opportunities.
On July 3, 2014, representatives of Philips, Lazard, Volcano and Goldman Sachs held a telephone call to review Volcanos financial
projections and preliminary view of potential synergies that could be achieved in a business combination.
On July 11, 2014,
representatives of Philips held a telephone call with the Chief Legal Officer of Volcano on a number of legal-related due diligence items, including intellectual property, employee matters, legal structure, prior acquisitions, material contracts and
regulatory matters.
On July 16, 2014, representatives of Goldman Sachs called representatives of Lazard to preview Volcanos
financial results for the second quarter of 2014. On that call, Goldman Sachs indicated that Volcanos financial results would be roughly in line with guidance that Volcano had previously provided to analysts/investors.
On July 21, 2014, representatives of Volcano and Goldman Sachs had a telephone call with representatives of Philips and Lazard to preview
Volcanos financial results for the second quarter of 2014. On that call, Volcano indicated that it had not met its revenue and operating margin forecasts for the second quarter of 2014, but that it did not anticipate any fundamental changes to
its long-term forecast.
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On July 25, 2014, representatives of Philips held a telephone call with members of management of
Volcano, during which Philips verbally delivered a non-binding indication of interest to acquire Volcano at a price of $24.00 per Share, subject to due diligence and other conditions. Philips followed up the call by delivering to Volcano a written
non-binding indication of interest consistent with such call. The written indication of interest included a request by Philips of an eight week exclusivity period during which Philips and Volcano would work to negotiate, sign and approve mutually
acceptable definitive agreements.
On July 30, 2014, representatives of Goldman Sachs called representatives of Lazard to inform Lazard
that the Volcano Board held a meeting to review Philips non-binding indication of interest and had determined to allow Philips to conduct due diligence on Volcano, but at a price of $24.00 per Share, would not grant Philips an exclusivity
period. On that same call, Goldman Sachs indicated that, as a result of trends seen in Volcanos business during the second quarter of 2014, Volcano intended to adjust downward its guidance to analysts/investors for the second half of 2014.
From August 6, 2014 and August 8, 2014, representatives of Philips and Lazard met with representatives of Volcano and Goldman Sachs in
San Diego, during which members of management of Volcano made a number of due diligence presentations regarding Volcanos operations and during which representatives of Philips and Lazard conducted on-site reviews of Volcano facilities.
On August 7, 2014, following the close of trading on NASDAQ, Volcano announced its results for the second quarter of 2014. In that
announcement, Volcano also indicated that it was revising its revenue guidance for 2014 to a range of $397 million$401 million, or $401 million$405 million on a constant currency basis, a decrease from the guidance provided in May 2014
of $413 million$421 million, or $417 million$425 million on a constant currency basis. On that same day, representatives of Philips and Volcano had a telephone call on which they discussed the financial results for the
second quarter of 2014 and Volcanos long-term financial projections.
On August 8, 2014, Volcano provided limited access to its
virtual data room to Philips and its advisors. Also on that same day, the price of Volcano common stock on NASDAQ, which had closed on August 7, 2014 at $15.78 per Share, closed at $12.56 per Share.
During the period from August 8, 2014 to September 12, 2014, Philips continued its due diligence of Volcano and, together with representatives
of Lazard, had numerous telephone conversations regarding Philips due diligence of Volcano and the process and timeline for consummating a business combination between Philips and Volcano.
On August 11, 2014, Volcano held an Analyst/Investor Day in which it delivered a presentation indicating that, among other things, it was
forecasting that its revenue would increase at a compound annual growth rate of 6%8% for the period from 20142018, which was lower than the forecast growth rate previously indicated by Volcano to Philips.
On August 27, 2014, Goldman Sachs delivered to Lazard an initial draft merger agreement.
On August 29, 2014, representatives of Goldman Sachs and Lazard held a telephone call to discuss the process and timeline for consummating a
business combination between Philips and Volcano. On that call, Goldman Sachs indicated that the Volcano Board was meeting on September 12, 2014 and that the Volcano Board had determined that if Philips and Volcano had not reached an agreement with
respect to a business combination by such time, Volcano would cease conversations with Philips and would focus on running Volcanos business as a stand-alone company.
On September 6, 2014, Cooley LLP (Cooley), counsel to Volcano, sent an initial draft of the Volcano disclosure schedules to
Sullivan & Cromwell LLP (Sullivan & Cromwell), counsel to Philips.
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On September 10, 2014, representatives of Philips and Volcano held a telephone call to review
Volcanos financial results for the months of July 2014 and August 2014 and to discuss Volcanos outlook for the third quarter of 2014.
On September 11, 2014, Sullivan & Cromwell sent Cooley a markup of the draft merger agreement, which included an indication that Philips
expected to enter into consulting/retention agreements with certain members of Volcano management in connection with signing a definitive merger agreement.
On September 12, 2014, Bert van Meurs, General Manager of Image-Guided Therapy at Philips, called R. Scott Huennekens,
President and Chief Executive Officer of Volcano, to indicate that Philips had not completed its due diligence, but if Philips were to make an offer to acquire Volcano, such offer would be at a price of $17.00$18.00 per Share. On that same
day, Goldman Sachs informed Lazard that such price was not acceptable and indicated that Philips and its advisors access to the virtual data room would cease and planned diligence sessions with management of Volcano would be cancelled.
On September 15, 2014, Mr. van Meurs met with Mr. Huennekens at the Transcatheter Cardiovascular Therapeutics conference in Washington,
D.C. During this meeting, Messrs. van Meurs and Huennekens discussed the possibility of reconvening discussions between Philips and Volcano with respect to a possible business combination, and Mr. Huennekens indicated that he and Ronald A.
Matricaria, Chairman of the Volcano Board, may be willing to meet with members of senior management of Philips.
On September 19, 2014,
Mr. van Meurs called Mr. Huennekens to set up a meeting between Messrs. Huennekens and Matricaria and Frans van Houten, President and Chief Executive Officer of Royal Philips, Stewart McCrone, Global Head of Mergers and Acquisitions of Royal
Philips, and Mr. van Meurs in Amsterdam on October 910, 2014.
During the first week of October 2014, representatives of Philips and
Volcano engaged in numerous discussions regarding the recommencement of Philips due diligence of Volcano and the process and timeline for completing such due diligence, and on October 1, 2014, Volcano reopened access to the virtual data room
to Philips and its advisors. During that time, Mr. Huennekens indicated Volcanos strong preference that Philips complete as much of its due diligence process as possible prior to the meetings scheduled to take place in Amsterdam on October
910, 2014.
On October 9, 2014, Messrs. Huennekens and Matricaria had dinner with Messrs. McCrone and van Meurs in Amsterdam to
discuss a possible business combination between Philips and Volcano. The next day, Messrs. Huennekens and Matricaria met with Messrs. van Houten, McCrone and van Meurs to discuss, among other things, the price at which the parties would be
willing to enter into a business combination, the process for completing Philips remaining due diligence and the timeline for consummating a transaction.
On October 20, 2014, Philips delivered a revised non-binding indication of interest to acquire Volcano at a price of $17.25 per Share, subject
to completion of specified due diligence matters and negotiation of mutually acceptable definitive documentation.
On October 21, 2014,
representatives of Goldman Sachs called representatives of Lazard to discuss the second revised non-binding indication of interest. On that call, representatives of Goldman Sachs indicated that Volcano would not be willing to enter into a business
combination with Philips at a price of less than $18 per Share and that Philips should inform Volcano by October 24, 2014, the date of the next meeting of the Volcano Board, if Philips would be willing to acquire Volcano at such a price.
Representatives of Goldman Sachs and Lazard also discussed the scope of Philips remaining due diligence and Volcanos desire to announce a business combination with Philips, if one were to occur, on or prior to November 6, 2014.
On October 22, 2014, Cooley delivered a revised draft merger agreement to Sullivan & Cromwell.
On October 23, 2014, representatives of Lazard called representatives of Goldman Sachs to inform Goldman Sachs that, as a result of its
continuing due diligence of Volcano, Philips could no longer support the
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$17.25 per Share price included in the second revised non-binding indication of interest delivered on October 21, 2014.
On October 24, 2014, following a meeting of the Volcano Board, representatives of Goldman Sachs called representatives of Lazard to indicate
that the Volcano Board had determined to cease conversations with Philips regarding a business combination and to focus on running Volcanos business. On that same day, Volcano shut off access to the virtual data room to Philips and its
advisors.
On October 28, 2014, Philips delivered to Messrs. Huennekens and Matricaria a further revised non-binding indication of
interest to acquire Volcano at a price of $16.00 per Share, subject to completion of specified due diligence matters and negotiation of mutually acceptable definitive documentation. Such email also included a revised draft merger agreement.
On October 29, 2014, representatives of Goldman Sachs called representatives of Lazard to indicate that Volcano was rejecting Philips revised
offer of $16.00 per Share, as Volcano believed the price was insufficient and that Philips needed to provide a more specific list of remaining due diligence that Philips wished to complete. Also on that call, Goldman Sachs indicated that Volcano
would be ceasing discussions with Philips regarding a business combination and would be focusing on running the Volcano business.
On
November 6, 2014, Volcano announced its results for the third quarter of 2014. In that announcement, Volcano also indicated that it was revising its revenue guidance for 2014 to a range of $393 million$397 million, a decrease from the guidance
provided on August 7, 2014 of $397 million$401 million. On November 7, 2014, the price of Volcano common stock on NASDAQ closed at $9.99 per Share.
On November 7, 2014, Mr. van Meurs sent an email to Mr. Huennekens indicating that Philips continued to be interested in
acquiring Volcano and that Philips was ready to move quickly to complete its remaining due diligence.
On November 14, 2014,
Mr. van Houten sent an email to Mr. Matricaria indicating that Philips continued to be interested in acquiring Volcano and requesting a telephone call to discuss the potential for renewing discussions regarding a business combination
between Philips and Volcano.
On November 17, 2014, Mr. van Houten and Mr. Matricaria held a telephone call regarding a business
combination between Philips and Volcano, including Philips outstanding due diligence requests. On that call, Mr. Matricaria indicated that Volcano would focus on running the Volcano business (rather than a business combination with Philips).
Mr. Matricaria also indicated his view that the price of Volcano common stock, which opened trading that day at $11.59, would increase to $13.00$14.00 per share in the near future, and that the Volcano Board would not be willing to enter into
a transaction with Philips at a price less than $18.00 per Share.
On November 20, 2014, Philips received a letter from Volcano in which
Volcano requested that Philips either return or destroy all diligence materials previously provided by Volcano.
On November 21,
2014, Mr. van Houten called Mr. Matricaria to indicate that Philips would be willing to acquire Volcano at a price of $18.00 per Share, subject to completion of a specific list of due diligence items. Mr. Matricaria responded that,
subject to Philips and Volcano reaching agreement on the form of a merger agreement, Mr. Matricaria would seek support and approval from the Volcano Board at a price of $18.00 per Share, and, upon obtaining such support and approval, Philips
would be provided access necessary to enable Philips to complete its due diligence.
On November 23, 2014, Mr. Matricaria sent
an email to Mr. McCrone reiterating his response to Mr. van Houten from the telephone call on November 21, 2014. Later that evening, Cooley sent a revised draft merger agreement to Sullivan & Cromwell.
During the period from November 25, 2014 to December 9, 2014, representatives of Philips, Lazard, Volcano and Goldman Sachs
continued to negotiate the scope of Philips remaining due diligence.
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On November 26, 2014, Cooley sent a revised draft of the Volcano disclosure schedules to Sullivan
& Cromwell. Later that day, Sullivan & Cromwell sent a revised draft merger agreement to Cooley.
On November 28, 2014,
representatives of Sullivan & Cromwell and Cooley held a telephone call to negotiate certain aspects of the draft merger agreement and to discuss the scope of the Philips remaining due diligence.
On November 29, 2014, Cooley sent a revised draft merger agreement to Sullivan & Cromwell.
On December 1, 2014, Sullivan & Cromwell sent a revised draft merger agreement and comments to the Volcano disclosure schedules to Cooley.
On December 10, 2014, Volcano provided Philips with access to certain information and individuals to enable Philips to complete its final
stage of due diligence.
During the period from December 10, 2014 to December 16, 2014, Philips completed the final stages of its due
diligence, and Sullivan & Cromwell and Cooley exchanged multiple drafts of the merger agreement and corresponding disclosure schedules. Also during this period, representatives of Philips, certain executives of Volcano and their respective
counsel negotiated the terms of the executives consulting and/or retention agreements with Philips.
On December 16, 2014, Volcano
informed Philips that the Volcano Board had unanimously adopted resolutions in which the Volcano Board (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in
the best interest of, Volcano and its stockholders; (ii) agreed that the Merger will be subject to Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the
consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their shares to Purchaser pursuant to the Offer. Later that day, the merger
agreement was executed and delivered on behalf of each of Volcano, Parent and Purchaser, and Royal Philips executed and delivered its guarantee.
On December 17, 2014, prior to the opening of trading on NASDAQ, Philips and Volcano issued a joint press release announcing the execution of
the merger agreement, and on December 20, 2014, Purchaser commenced the Offer.
11. |
The Merger Agreement; Other Agreements |
The Merger Agreement
The following is a summary of certain provisions of the Merger Agreement. This summary does not purport to be complete and is qualified in its
entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit (d)(1) to the Schedule TO, which is incorporated herein by reference. Copies of the Merger Agreement and the Schedule TO, and any other
filings that we make with the SEC with respect to the Offer or the Merger, may be obtained in the manner set forth in Section 8 Certain Information Concerning Purchaser, Parent and Royal PhilipsAvailable
Information. Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below.
Explanatory Note Regarding the Merger Agreement
The Merger Agreement is included to provide you with information regarding its terms. Factual disclosures about Parent, us and Volcano or
any of our or their respective affiliates contained in this Offer to Purchase or in our or their respective public reports filed with the SEC, as applicable, may supplement,
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update or modify the factual disclosures about Parent, us and Volcano or any of our or their respective affiliates contained in the Merger Agreement. The representations, warranties and covenants
made in the Merger Agreement by Parent, us and Volcano were qualified and subject to important limitations agreed to by Parent, us and Volcano in connection with negotiating the terms of the Merger Agreement. In particular, in your review of the
representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in
which a party to the Merger Agreement may have the right not to consummate the Offer or the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between
the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and
documents filed with the SEC, and in some cases were qualified by disclosures set forth in schedules that were provided by each party to the other but are not publicly filed as part of the Merger Agreement. Moreover, information concerning the
subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Offer to Purchase, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a
representation or warranty may have been included in this Offer to Purchase.
The Offer
The Merger Agreement provides that we will commence the Offer as promptly as practicable after the date of the Merger Agreement (but in no
event later than December 30, 2014). Subject to the satisfaction of the Minimum Condition and the satisfaction or waiver by us of the other conditions that are described in Section 15 Conditions to the Offer, we
will (and Parent will cause us to), as soon as practicable after the Expiration Date (but no later than 9:00 A.M., Eastern Time, on the first business day after the Expiration Date), accept for payment and promptly thereafter (but no later than the
first business day after the Expiration Date) pay for all Shares validly tendered and not properly withdrawn pursuant to the Offer. The initial Expiration Date will be 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59
P.M., Eastern time, on January 28, 2015).
Terms and Conditions of the Offer
Our obligations to accept for payment, and pay for, any Shares tendered pursuant to the Offer are subject to the conditions set forth in
Section 15 Conditions to the Offer. The Offer Conditions are for the sole benefit of Parent and us, and we or Parent may waive, in whole or in part, any condition to the Offer from time to time, in our or its sole discretion,
provided that we and Parent may not waive the Minimum Condition, or (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer, (iii) decrease the maximum number of Shares sought to be purchased in the
Offer, (iv) impose conditions to the Offer in addition to the Offer Conditions, (v) amend or modify any of the Offer Conditions in a manner that adversely affects holders of Shares generally, (vi) change the Minimum Condition,
(vii) extend or otherwise change the Expiration Date in a manner other than as required or permitted by the Merger Agreement or (viii) provide any subsequent offering period within the meaning of Rule 14d-11 promulgated
under the Exchange Act, in each case, without the prior written consent of Volcano.
Extensions of the Offer
If, as of the Expiration Date, any Offer Condition is not satisfied and has not been waived (if permitted under the Merger Agreement), we may,
in our discretion (and without the consent of Volcano or any other person), extend the Offer on one or more occasions, for an additional period of up to ten business days per extension, to permit such Offer Condition to be satisfied. If the
conditions to the Offer have not been satisfied or waived (other than the Minimum Condition, which we and Parent may not waive) and the Merger Agreement has not been terminated, Volcano may require us to extend the Offer on one or more occasions,
for an additional
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period of up to ten business days per extension, until all conditions to the Offer have been satisfied or waived (other than the Minimum Condition, which we and Parent may not waive). In
addition, we will extend the Offer either (i) for the minimum period required by any legal requirement, interpretation or position of the SEC or its staff or NASDAQ or its staff or (ii) for periods of up to ten business days per extension
until any waiting period (and any extension thereof) applicable to the consummation of the Offer under the HSR Act and any foreign antitrust or competition-related legal requirement has expired or been terminated. However, in no event will we
(i) be required to extend the Offer beyond the Extension Deadline or (ii) be permitted to extend the Offer beyond the Extension Deadline without the prior written consent of Volcano.
Volcano Board Recommendation
The Volcano Board has, at a meeting duly called and held, unanimously (i) determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the Merger will be subject to Section 251(h) of the DGCL; (iii) approved the
execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender
their shares to Purchaser pursuant to the Offer (the Volcano Board Recommendation).
The Merger
The Merger Agreement provides that, immediately following the Offer Acceptance Time, subject to the terms and conditions of the Merger
Agreement, and in accordance with the DGCL, at the Effective Time:
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we will be merged with and into Volcano and, as a result of the Merger, our separate corporate existence will cease; |
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Volcano will be the Surviving Corporation in the Merger and will become a wholly owned subsidiary of Parent; and |
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all of our rights, privileges, immunities, powers and franchises and those of Volcano will vest in Volcano as the Surviving Corporation, and all of our liabilities, obligations and restrictions and those of Volcano will
become the liabilities, obligations and restrictions of Volcano as the Surviving Corporation. |
Application of
Section 251(h) of the DGCL. The Merger will be governed by Section 251(h) of the DGCL. Accordingly, after the Offer Acceptance Time, Parent, we and Volcano have agreed, subject to satisfaction of the conditions set forth in the Merger
Agreement, to consummate the Merger immediately following the Offer Acceptance Time.
Certificate of Incorporation;
Bylaws. Unless otherwise determined by Parent prior to the Effective Time: (i) the certificate of incorporation of the Surviving Corporation will be amended and restated as of the Effective Time to conform to the certificate of
incorporation of Purchaser as in effect immediately prior to the Effective Time; and (b) the bylaws of the Surviving Corporation will be amended and restated as of the Effective Time to conform to the bylaws of Purchaser as in effect
immediately prior to the Effective Time.
Changes of Directors and Officers in Connection with the Offer and the Merger. The Merger
Agreement provides that the directors and officers of Purchaser immediately prior to the Effective Time will be the directors and officers of the Surviving Corporation immediately following the Effective Time.
Merger Closing Conditions. Our obligations and the obligations of Parent and Volcano to effect the Merger are subject to the
satisfaction of each of the following conditions:
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there not having been issued by any court of competent jurisdiction or remaining in effect any temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger, or any action having been taken, or any legal requirement or order |
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having been promulgated, entered, enforced, enacted, issued or deemed applicable to the Merger by any governmental body which directly or indirectly prohibits, or makes illegal the consummation
of the Merger; and |
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Purchaser (or Parent on Purchasers behalf) having accepted for payment and paid for all of the Shares validly tendered pursuant to the Offer and not withdrawn. |
Merger Consideration. At the Effective Time, each Share then outstanding (other than Shares that are held by any stockholders who
properly demand appraisal in connection with the Merger as described in Section 17 Certain Legal Matters; Regulatory ApprovalsAppraisal Rights) will be converted into the right to receive the Offer Price in cash,
without interest, subject to any withholding of taxes required by applicable legal requirements, except for Shares then owned by Parent, Purchaser or any other wholly owned subsidiary of Parent and Shares held by Volcano or by any of its wholly
owned subsidiaries, which Shares will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor.
Payment for Shares. Prior to the Effective Time, Parent will designate, pursuant to the terms of the Merger Agreement, a bank or
trust company reasonably acceptable to Volcano to act as paying agent (in such capacity, the Paying Agent) for the holders of Shares to receive the funds to which holders of such Shares become entitled pursuant to the Merger.
Substantially concurrent with the Effective Time, Parent will deposit, or cause to be deposited, with the Paying Agent cash sufficient to make payment of the cash consideration payable in connection with the Merger.
Promptly after the Effective Time (but in no event later than ten days thereafter), the Surviving Corporation will 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 (i) a form of letter of transmittal (which will be in customary form and will specify that delivery will be effected, and risk of
loss and title to the Share Certificates will pass, only upon proper delivery of the Share Certificates (or effective affidavits of loss in lieu thereof) to the Paying Agent) for use in effecting delivery of Shares to the Paying Agent and
(ii) instructions for use in effecting the surrender of the Share Certificates or non-certificated Shares represented by book-entry (Book-Entry Shares) pursuant to such letter of transmittal. Upon surrender to the Paying Agent of
Share Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares, 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 Share Certificates or Book-Entry Shares will be entitled to receive in exchange therefor the Merger Consideration for each Share formerly evidenced by such Share Certificates or Book-Entry
Shares, and such Share Certificates and Book-Entry Shares will then be canceled. No interest will accrue or be paid on the Merger Consideration payable upon the surrender of any Share Certificates or Book-Entry Shares for the benefit of the holder
thereof. If the payment of any Merger Consideration is to be made other than to the person in whose name the surrendered Share Certificates formerly evidencing the Shares is registered on the stock transfer books of Volcano, it will be a condition
of payment that the Share Certificate so surrendered will be endorsed properly or otherwise be in proper form for transfer and that the person requesting such payment will have paid all transfer and other similar taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder of the Share Certificate surrendered, or will have established to the satisfaction of the Surviving Corporation that such taxes either have been paid or are not
applicable. Payment of the applicable Merger Consideration with respect to Book-Entry Shares will only be made to the person in whose name such Book-Entry Shares are registered.
The transmittal instructions will include instructions if the stockholder has lost a Share Certificate or if it has been stolen or destroyed.
The stockholder will have to provide an affidavit to that fact and, if required by Parent or us, post a bond in such reasonable amount as we may reasonably direct, as indemnity against any claim that may be made against it in respect of such Share
Certificate.
At any time following the 180th day after the Effective Time, the Surviving Corporation will 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 Share Certificates or Book-Entry Shares (including, all interest and other income received by the Paying
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Agent in respect of all funds made available to it), and, thereafter, such holders will be entitled to look to the Surviving Corporation (subject to abandoned property, escheat and other similar
legal requirements) only as general creditors thereof with respect to the Merger Consideration that may be payable upon due surrender of Share Certificates or Book-Entry Shares held by them. Neither the Surviving Corporation nor the Paying Agent
will be liable to any holder of Share Certificates or Book-Entry Shares for the Merger Consideration delivered in respect of such share to a public official pursuant to any abandoned property, escheat or other similar legal requirements. Any amounts
remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any governmental body will become, to the extent permitted by applicable legal requirements, the property of the Surviving
Corporation or its designee, free and clear of all claims or interest of any person previously entitled thereto.
Each of the Surviving
Corporation, Parent and Purchaser will be entitled to deduct and withhold (or cause the Paying Agent to deduct and withhold) from the Merger Consideration payable to any holder of Shares or any other consideration otherwise payable pursuant to the
Merger Agreement such amounts as it is required by any legal requirement to deduct and withhold with respect to taxes. Each such payor will take all action as may be necessary to ensure that any such amounts so withheld are timely and properly
remitted to the appropriate governmental body. To the extent that amounts are so withheld, such withheld amounts will be treated for all purposes of the Merger Agreement as having been paid to the holder of Shares or other recipient of consideration
under the Merger Agreement in respect of which such deduction and withholding was made.
Treatment of Volcano Options and Volcano RSUs
Each Volcano Option that is outstanding as of immediately prior to the Offer Acceptance Time will be accelerated and become fully
vested and exercisable immediately prior to the Offer Acceptance Time. As of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each Volcano Option that is then outstanding and unexercised will be
cancelled and be converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (i) the total number of Shares subject to such fully vested Volcano Option
immediately prior to the Effective Time and (ii) the excess, if any, of (x) the Merger Consideration over (y) the exercise price payable per Share under such Volcano Option. Each Volcano Option that has an exercise price per Share
that is equal to or greater than the Merger Consideration will be cancelled at the Effective Time and will cease to exist without entitling the holder thereof to receive any payment before or after the Effective Time.
Each Volcano RSU that is outstanding as of immediately prior to the Offer Acceptance Time will become fully vested immediately prior to the
Offer Acceptance Time. In lieu of an issuance of Shares in settlement of such vested Volcano RSUs, as of the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each Volcano RSU will be cancelled and
converted into the right to receive an amount in cash, rounding such amount down to the nearest whole cent, equal to the product obtained by multiplying (i) the total number of Shares otherwise issuable with regard to such fully vested Volcano
RSUs immediately prior to the Effective Time and (ii) the Merger Consideration.
Representations and Warranties
The Merger Agreement contains representations and warranties of Parent, us and Volcano.
Some of the representations and warranties in the Merger Agreement made by Volcano are qualified as to materiality or
Material Adverse Effect. For purposes of the Merger Agreement, Material Adverse Effect with respect to Volcano means any change, event, occurrence, violation, inaccuracy, circumstance or development that, individually or in
the aggregate, has had or would reasonably be expected to have, a material adverse effect on (a) the business, assets, financial condition or results of operations of Volcano and its subsidiaries taken as a whole or (b) the ability of
Volcano to consummate the transactions contemplated by the Merger Agreement in a timely manner; provided, however, that none of the following will be deemed in and of
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themselves, either alone or in combination, to constitute, and none of the following will be taken into account in determining whether there has been, or would reasonably be expected to have, a
Material Adverse Effect:
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any change in the market price or trading volume of Volcanos stock; |
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(ii) |
any loss of, or adverse change in, the relationship of Volcano with its customers, employees or suppliers or any other change, event, occurrence, violation, inaccuracy, circumstance or development that was proximately
caused by the announcement of the Merger Agreement or the pendency or consummation of the Offer, the Merger or the other transactions contemplated by the Merger Agreement (other than for purposes of certain representations or warranties relating to
non-contravention and consents but subject to disclosures relating thereto); |
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any change, event, occurrence, circumstance or development in the medical devices industry or in the economy generally or other market conditions, except to the extent that Volcano and its subsidiaries are adversely
affected disproportionately relative to the other participants in such industry; |
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any change, event, occurrence, circumstance or development arising directly or indirectly from or otherwise relating to fluctuations in the value of any currency; |
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any change, event, occurrence, circumstance or development arising directly or indirectly from or otherwise relating to any act of terrorism, war, epidemic or any other similar event, except to the extent that such
change, event, occurrence, circumstance or development disproportionately affects Volcano and its subsidiaries relative to other participants in the medical device industry; |
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the failure of Volcano to meet internal or analysts expectations or projections for the results of operations of Volcano; |
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(vii) |
any adverse effect arising directly from or otherwise directly relating to any action taken by Volcano at the written direction of Parent or any action specifically required to be taken by Volcano, or the failure of
Volcano to take any action that Volcano is specifically prohibited by the terms of the Merger Agreement from taking to the extent Parent fails to give its consent thereto after a written request therefor; |
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any change in legal requirements or United States generally accepted accounting principles (GAAP); |
provided that the exceptions in clauses (i) and (vi) will not prevent or otherwise affect a determination that the
underlying cause of any such decline or failure referred to therein (if not otherwise falling within any of the exceptions provided by clauses (ii) through (v) or (vii) through (viii) above) has had or would
be reasonably expected to have a Material Adverse Effect.
Some of the representations and warranties in the Merger Agreement made by
Parent and us are qualified as to materiality or Material Adverse Effect. For purposes of the Merger Agreement, a Material Adverse Effect with respect to Parent means any effect, change, event or occurrence that
would individually or in the aggregate, prevent, materially delay or materially impair the ability of Parent or Purchaser to consummate the transactions contemplated by the Merger Agreement.
In the Merger Agreement, Volcano has made customary representations and warranties to Parent and us with respect to, among other things:
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the due organization, valid existence, good standing and qualification to do business of Volcano and its subsidiaries; |
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the certificate of incorporation and bylaws of Volcano and its subsidiaries; |
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Volcanos capitalization; |
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Volcanos SEC filings and financial statements; |
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the absence of certain changes; |
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intellectual property matters, including the absence of infringement of rights of others; |
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material contracts and the absence of any defaults under material contracts; |
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the absence of certain material undisclosed liabilities; |
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compliance with applicable laws and regulatory requirements; |
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compliance with certain anti-corruption and anti-bribery laws; |
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possession of governmental authorizations necessary to conduct Volcanos business; |
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tax matters, including filings of material tax returns and payment of material taxes; |
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employee benefit matters, including the status of employee benefit plans; |
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the absence of litigation or other legal proceedings, orders, claims or investigations; |
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the corporate authority and power of Volcano to perform its obligations under the Merger Agreement and the binding nature of the Merger Agreement; |
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the inapplicability of any anti-takeover law to the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement; |
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the inapplicability of a stockholder vote required to authorize or adopt the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement; |
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the absence of any conflict between the execution of the Merger Agreement and the consummation of the Offer and the Merger, on the one hand, and the organizational or governing documents or certain agreements of Volcano
and its subsidiaries or applicable laws, on the other hand; |
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the amendment to Volcanos rights agreement dated June 20, 2006 by and between Volcano and American Stock Transfer & Trust Company; |
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the receipt by the Volcano Board of a fairness opinion from Goldman, Sachs & Co.; and |
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parties entitled to financial advisory fees based on Volcanos arrangements. |
In the
Merger Agreement, we and Parent have made customary representations and warranties to Volcano with respect to, among other things:
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the due organization of Parent; |
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the formation and activities of Purchaser; |
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the corporate authority and power of each of Parent and Purchaser to perform their respective obligations under the Merger Agreement and the binding nature of the Merger Agreement; |
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the absence of any conflict between the execution of the Merger Agreement and the consummation of the Offer and the Merger, on the one hand, and the organizational or governing documents or certain agreements of Parent
and Purchaser or applicable laws, on the other hand; |
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the accuracy of information supplied by Parent and Purchaser for inclusion in the Schedule 14D-9, and the absence of material untrue statements or omissions in this Offer to Purchase. |
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the absence of any material transaction-related litigation or other legal proceedings, claims or investigations; |
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availability of funds necessary to perform our respective obligations under the Merger Agreement, including the payment of the aggregate Offer Price and consideration payable in the Merger; |
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lack of ownership of Shares by Parent, Purchaser or their respective subsidiaries; and |
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parties entitled to financial advisory fees based on Parents and our arrangements. |
None
of the representations and warranties contained in the Merger Agreement survive the consummation of the Merger.
Conduct of Business of
Volcano
The Merger Agreement provides that, except as required or otherwise contemplated by the Merger Agreement, as required by
applicable law, or with the prior written consent of Parent, from the date of the Merger Agreement until the earlier of the Offer Acceptance Time or the termination of the Merger Agreement pursuant to its terms, Volcano will conduct in all material
respects its business and operations in the ordinary course and will promptly notify Parent of (i) any knowledge of any notice from any person alleging that the consent of such person is or may be required in connection with any of the
transactions contemplated by the Merger Agreement, and (ii) any legal proceeding commenced, or, to its knowledge threatened, relating to or involving Volcano that relates to the consummation of the transactions contemplated by the Merger
Agreement. Volcano will use commercially reasonable efforts to preserve intact the material components of its current business organization, including keeping available the services of current officers and key employees, and use commercially
reasonable efforts to maintain its and its subsidiaries relations and goodwill with all material suppliers, material customers, material distributors, governmental bodies and other material business relations; provided, however, that Volcano
will be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.
In
addition, during the same period, except as required by the Merger Agreement, as required by legal requirements, or otherwise with the prior written consent of Parent (which consent may not be unreasonably withheld, delayed or conditioned), Volcano
will not, and will not permit any of its subsidiaries to, take certain actions (subject to certain further exceptions to the individual restrictions set forth in the Merger Agreement, including in certain circumstances exceptions relating to
Volcanos ordinary course of business consistent with past practice), including the following:
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(i) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, except dividends and distributions paid or made to Volcano by
its wholly-owned subsidiaries, or (ii) repurchase, redeem or otherwise reacquire any of its shares of capital stock, or any rights, warrants or options to acquire any shares of its capital stock, other than: (A) repurchases of Shares
outstanding as of the date of the Merger Agreement pursuant to Volcanos right (under written commitments in effect as of the date of the Merger Agreement) to purchase Shares held by officers, employees, directors, independent contractors or
consultants of Volcano or its subsidiaries only upon termination of such persons employment or engagement by Volcano; (B) repurchases of Volcano Options or warrants to purchase Shares (or shares of capital stock issued upon the exercise
or vesting thereof) outstanding on the date of the Merger Agreement (in cancellation thereof) pursuant to the terms of any such Volcano Option (and, with respect to any such Volcano Options, as permitted by the terms of the Volcano Equity Plans) or
warrant to purchase Shares (in effect as of the date of the Merger Agreement) between Volcano and an employee, consultant or member of the Volcano Board only upon termination of such persons employment or engagement by Volcano; or
(C) acquisitions of Shares tendered by holders of Volcano Options, Volcano RSUs and warrants to purchase Shares outstanding on the date of the Merger Agreement in connection with withholding to satisfy the tax obligations or to pay the exercise
price of such award, as applicable; |
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split, combine, subdivide or reclassify any shares of its capital stock or other equity interests; |
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sell, issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant by Volcano of (i) any capital stock, equity interest or other security of
Volcano, (ii) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of Volcano, or (iii) any instrument convertible into or exchangeable for any capital stock, equity
interest or other security of Volcano (except that Volcano may issue Shares as required to be issued upon the settlement of Volcano RSUs outstanding on the date of the Merger Agreement, or upon the exercise of Volcano Options or warrants to purchase
Shares outstanding as of the date of the Merger Agreement, or pursuant to the operation of the ESPP in accordance with the Merger Agreement); |
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(i) grant or increase in any manner any change-in-control, severance or termination pay to (or amend any such agreement with) any director, officer, advisor, consultant or employee of Volcano or any of its subsidiaries,
(ii) grant any new awards under a Volcano Equity Plan, (iii) except as required by applicable legal requirements, establish, adopt, terminate or amend certain employee benefit plans, or amend or waive any of its rights under any of such
plans, (iv) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under certain employee benefit plans or remove any existing restrictions in any such plans or
awards made thereunder or take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any such plans, to the extent not already provided in any such plans,
(v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to certain employee benefit plans that is required by applicable legal requirements to be funded or change the manner in which
contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable legal requirements, (vi) forgive any loans to any director, officer, advisor, consultant or employee
of Volcano or any of its subsidiaries or (vii) grant any director, officer, advisor, consultant or employee of Volcano or any of its subsidiaries any increase in compensation, bonuses, commissions or other benefits (except that Volcano:
(A) may provide increases in salary, wages or benefits to non-executive officer employees with annual base salary below $200,000 in the ordinary course of business; and (B) may make usual and customary annual or quarterly bonus payments in
the ordinary course of business in accordance with certain bonus plans; |
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hire any employee with an annual base salary in excess of $250,000 or engage any independent contractor (who is a natural person) with annual base compensation in excess of $300,000; |
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amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents; |
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form any subsidiary, acquire any equity interest in any other entity or enter into any joint venture, partnership, limited liability corporation or similar arrangement; |
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make or authorize any capital expenditure (except that Volcano may make any capital expenditure that: (i) is provided for in Volcanos capital expense budget either delivered or made available to Parent or to
Parents representatives prior to the date of the Merger Agreement, which expenditures will be in accordance with the categories set forth in such budget; or (ii) when added to all other capital expenditures made on behalf of Volcano since
the date of the Merger Agreement but not provided for in Volcanos capital expense budget either delivered or made available to Parent or to Parents representatives prior to the date of the Merger Agreement, does not exceed $500,000
individually and $1,000,000 in the aggregate during any fiscal quarter); |
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acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other
than any patent expiring at the end of its statutory term), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any encumbrance (other
than certain permitted encumbrances) any material right or other material asset or property (except, in the case of any of the foregoing (i) in the ordinary course of business consistent with past practice (including
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entering into non-exclusive license agreements in the ordinary course of business), (ii) pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the
conduct of the business of Volcano and (iii) as provided for in Volcanos capital expense budget delivered or made available to Parent or to Parents representatives prior to the date of the Merger Agreement or when added to all other
capital expenditures made on behalf of Volcano since the date of the Merger Agreement but not provided for in Volcanos capital expense budget either delivered or made available to Parent or to Parents representatives prior to the date of
the Merger Agreement, does not exceed $500,000 individually and $1,000,000 in the aggregate during any fiscal quarter); |
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lend money or make capital contributions or advances to or make investments in, any person; |
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incur or guarantee any indebtedness (except for short-term borrowings, of not more than $250,000 in the aggregate, incurred in the ordinary course of business consistent with past practice, advances to employees and
consultants for travel and other business related expenses in the ordinary course of business and transactions pursuant to Volcanos currency hedging plan in the ordinary course of business consistent with past practice); |
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amend or modify in any material respect, waive any rights under, terminate, replace or release, settle or compromise any material claim, liability or obligation under certain material contracts or enter into any
contract which if entered into prior to the date of the Merger Agreement would have been a material contract, excluding customer and other contracts entered into in the ordinary course of business consistent with past practice; |
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(i) make any material change to any accounting method or accounting period used for tax purposes (or request such a change); (ii) make any material tax election (other than a tax election that is consistent with a
tax election made in a previous period); (iii) rescind or change any material tax election; (iv) file an amended tax return that could materially increase the taxes payable by Volcano; (v) enter into a closing agreement with any
governmental body regarding any material tax; (vi) settle, compromise or consent to any material tax claim or assessment or surrender a right to a material tax refund; (vii) waive or extend the statute of limitations with respect to any
material tax other than (A) pursuant to extensions of time to file a tax return obtained in the ordinary course of business or (B) pursuant to an extension granted in the ordinary course of business in connection with an audit of federal,
state or local taxes to prevent the assessment or collection of a tax; or (viii) take any other action with respect to taxes that is outside the ordinary and usual course of business or inconsistent with past practice; |
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commence any legal proceeding, except with respect to: (i) routine matters in the ordinary course of business; or (ii) in connection with a breach of the Merger Agreement or any other agreements contemplated
thereby; |
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settle, release, waive or compromise any legal proceeding or other claim (or threatened legal proceeding or other claim), other than any legal proceeding relating to a breach of the Merger Agreement or pursuant to a
settlement that does not relate to any of the transactions contemplated by the Merger Agreement and: (i) that results solely in a monetary obligation involving only the payment of monies by Volcano of not more than $500,000 in the aggregate; or
(ii) that results solely in a monetary obligation that is funded by an insurance policy of, Volcano and the payment of monies by Volcano that together with any settlement made under subsection (i) of this bullet are not more than
$500,000 in the aggregate (not funded by an indemnity or through insurance policies); |
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enter into any collective bargaining agreement or other agreement with any labor organization (except to the extent required by applicable legal requirements); |
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amend, modify or waive any material provision in Volcanos Rights Agreement or adopt or implement any new stockholder rights plan or similar arrangement; |
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adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Volcano or any of its subsidiaries; or |
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authorize any of, or agree or commit to take, any of the foregoing actions. |
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No Solicitation
Volcano and its subsidiaries have agreed that, except as expressly permitted by the non-solicitation provisions of the Merger Agreement, during
the period from the date of the Merger Agreement until the earlier of the Offer Acceptance Time and the termination of the Merger Agreement, they will not, and will not authorize or permit any of their representatives to, directly or indirectly:
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continue any solicitation, knowing encouragement, discussions or negotiations with any third party that may be ongoing with respect to an Acquisition Proposal (as defined below); |
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solicit, initiate, or knowingly induce, facilitate or knowingly encourage (including by way of furnishing non-public information) any inquiries or indications of interest regarding, or the making of any proposal or
offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; |
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engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any third party any non-public information in connection with, in response to, or for the purpose of facilitating
or knowingly encouraging, an Acquisition Proposal or any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal; |
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adopt, approve, recommend, submit to stockholders or declare advisable any Acquisition Proposal; |
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enter into any binding or nonbinding letter of intent, term sheet, merger agreement, acquisition agreement, option agreement, agreement in principle or similar agreement with respect to an Acquisition Proposal or any
proposal or offer that could reasonably be expected to lead to an Acquisition Proposal; or |
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except where the failure to take such action would be inconsistent with the fiduciary duties of the Volcano Board to Volcanos stockholders under applicable legal requirements, release or permit the release prior
to the earlier of the Offer Acceptance Time and the termination of the Merger Agreement of any third party from, or waive or permit the waiver of any provision of, or fail to enforce or cause to be enforced, any standstill agreement to
which Volcano or any of its subsidiaries is a party. |
However, if at any time on or after the date of the Merger Agreement
and prior to the Offer Acceptance Time, Volcano or any of its representatives receives an unsolicited bona fide written Acquisition Proposal from any third party, which Acquisition Proposal was made or renewed on or after the date of the
Merger Agreement (and has not been withdrawn) and did not result from any breach of the non-solicitation and recommendation provisions of the Merger Agreement, (i) Volcano and its representatives may contact such third party to clarify the
terms and conditions thereof and (ii) if (A) the Volcano Board determines in good faith, after consultation with its independent financial advisors of nationally recognized reputation and outside legal counsel, that such Acquisition
Proposal constitutes or would reasonably be expected to lead to a Superior Offer (as defined below) and that failure to take such action would be inconsistent with the fiduciary duties of the Volcano Board to Volcanos stockholders under
applicable legal requirements, and (B) prior to or concurrently with furnishing any such information to, or entering into discussions with, such third party, Parent receives written notice from Volcano of the identity of such third party and of
Volcanos intention to furnish information to, or enter into discussions with, such third party, then Volcano and its representatives may (x) furnish, pursuant to (but only pursuant to) an acceptable confidentiality agreement, information
(including non-public information) with respect to Volcano and its subsidiaries to the third party who has made such Acquisition Proposal; provided that Volcano will concurrently provide to Parent any non-public information concerning Volcano and
its subsidiaries that is provided to any third party given such access which was not previously provided to Parent or its representatives and (y) engage in or otherwise participate in discussions or negotiations (and waive such third
partys noncompliance with the provisions of any standstill agreement to the extent (but only to the extent) necessary to permit such discussions) with the third party making such Acquisition Proposal.
For purposes of the Merger Agreement, Acquisition Proposal means any proposal or offer from any third party (other than Parent and
its affiliates) or group, within the meaning of Section 23(d) of the Exchange Act, relating to, in a single transaction or series of related transactions, any (i) direct or indirect acquisition, license,
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lease, exchange or other disposition of assets of Volcano and its subsidiaries equal to 20% or more of Volcanos consolidated assets (including, without limitation, equity securities of
Volcanos subsidiaries) or to which 20% or more of Volcanos revenues or earnings on a consolidated basis are attributable, (ii) issuance or acquisition of 20% or more of the voting power of or of any class of equity securities of
Volcano or any of its subsidiaries, (iii) recapitalization, tender offer or exchange offer that if consummated would result in any third party or group beneficially owning 20% or more of the voting power of or of any class of equity securities
of Volcano or any of its subsidiaries or (iv) merger, consolidation, amalgamation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving Volcano or any of its subsidiaries.
For purposes of the Merger Agreement, Acquisition Inquiry means an inquiry, indication of interest, proposal, offer or request for
information from any third party (other than Parent and its affiliates) that relate to or could reasonably be expected to lead to an Acquisition Proposal.
For purposes of the Merger Agreement, Superior Offer means an unsolicited, bona fide written Acquisition Proposal not
resulting from a breach of the non-solicitation provisions of the Merger Agreement on terms that the Volcano Board determines, in its good faith judgment, after consultation with its outside legal counsel and its financial advisor of nationally
recognized reputation, is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory and financing aspects (including certainty of financing and certainty of closing) of the proposal and the third
party making the proposal and other aspects of the Acquisition Proposal that the Volcano Board deems relevant, and if consummated, would result in a transaction more favorable to Volcanos stockholders (solely in their capacity as such) from a
financial point of view than the transactions contemplated by the Merger Agreement; provided that for purposes of the definition of Superior Offer, the references to 20% in the definition of Acquisition Proposal will be
deemed to be references to 80%.
Following the date of the Merger Agreement, Volcano will promptly (and in any event within 36
hours) notify Parent if any Acquisition Proposal or any Acquisition Inquiry are received by Volcano or any of its representatives, and provide to Parent (i) the identity of the third party making or submitting such Acquisition Proposal or
Acquisition Inquiry, (ii) a copy of all material written materials provided by the third party in connection with such Acquisition Proposal or Acquisition Inquiry and (iii) a written summary of all material oral communications made by any
third party in connection with such Acquisition Proposal or Acquisition Inquiry. After receipt of any Acquisition Proposal or Acquisition Inquiry, Volcano will keep Parent reasonably informed of any material developments, discussions or negotiations
regarding any Acquisition Proposal or Acquisition Inquiry on a prompt basis and upon the request of Parent will reasonably inform Parent of the status of such Acquisition Proposal or Acquisition Inquiry. Volcano agreed that it and its subsidiaries
will not enter into any confidentiality agreement with any third party subsequent to the date of the Merger Agreement which would prohibit Volcano from providing any information to Parent or otherwise prohibit Volcano from complying with its
obligations under the non-solicitation provisions of the Merger Agreement.
Nothing in the Merger Agreement will prohibit Volcano from
(i) taking and disclosing to the stockholders of Volcano a position contemplated by Rule 14e-2(a) or making a statement contemplated by Item 1012(a) of Regulation M-A or Rule 14d-9 promulgated under the Exchange Act, (ii) making
any disclosure to the stockholders of Volcano that is required by applicable legal requirements or (iii) making any stop, look and listen communication pursuant to Rule 14d-9(f) promulgated under the Exchange Act; provided, that in
the case any of the foregoing, if such disclosure does not specifically reaffirm the Volcano Board Recommendation or has the substantive effect of withdrawing or adversely modifying the Volcano Board Recommendation, such disclosure shall be deemed
to be a Volcano Adverse Change Recommendation (as defined below), and Parent will have the right to terminate the Merger Agreement.
Volcano Boards Recommendation; Change of Board Recommendation
Volcano consented to the Offer and the Volcano Board made the Volcano Board Recommendation, which includes the recommendation that the holders
of Shares tender their Shares pursuant to the Offer. Volcano also
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consented to the inclusion of a description of the Volcano Board Recommendation in this Offer to Purchase and the documents related to the Offer. None of Volcano, the Volcano Board or any
committee thereof may:
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(i) withhold, withdraw, qualify or modify in a manner adverse to Parent or Purchaser, or publicly announce any intention to withhold, withdraw, qualify or modify in a manner adverse to Parent or Purchaser, the
Volcano Board Recommendation, or fail to include the Volcano Board Recommendation in (or remove from) the Schedule 14D-9 or (ii) approve, endorse, recommend or declare advisable, or publicly propose or announce any intention to approve,
endorse, recommend or declare advisable, any Acquisition Proposal (any action described in clauses (i) and (ii) being referred to as a Volcano Adverse Change Recommendation); or |
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adopt, approve, recommend, submit to stockholders or declare advisable, or resolve or determine to adopt, approve, recommend, submit to stockholders or declare advisable, or allow Volcano or any of its subsidiaries to
execute or enter into any contract constituting any Acquisition Proposal, or requiring, or reasonably likely to cause, Volcano to abandon, terminate, delay or fail to consummate, or that would otherwise materially impede, interfere with or be
inconsistent with, the transactions contemplated by the Merger Agreement (other than an acceptable confidentiality agreement) (any such contract, an Alternative Acquisition Agreement), except as permitted under the Merger Agreement.
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However, at any time prior the Offer Acceptance Time, the Volcano Board may make a Volcano Adverse Change Recommendation or
terminate the Merger Agreement to enter into a Specified Agreement (as defined below) if and only if:
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if the decision to make a Volcano Adverse Change Recommendation or terminate the Merger Agreement to enter into a Specified Agreement is in connection with an Acquisition Proposal: |
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Volcano is not in breach of its non-solicitation obligations under the Merger Agreement; |
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Volcano has received a bona fide written Acquisition Proposal (which Acquisition Proposal did not arise out of a breach of Volcanos non-solicitation obligations under the Merger Agreement) from any third
party that has not been withdrawn; |
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the Volcano Board has determined, in good faith, that such Acquisition Proposal is a Superior Offer; |
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the Volcano Board determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the Volcano Board to Volcanos
stockholders under applicable legal requirements; |
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Volcano has given Parent prior written notice of its intention to consider making a Volcano Adverse Change Recommendation or terminate the Merger Agreement to enter into a Specified Agreement at least three business
days prior to making any such Volcano Adverse Change Recommendation or termination (a Determination Notice) (which notice will not constitute a Volcano Adverse Change Recommendation); |
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(i) Volcano has provided to Parent the material terms and conditions of the Acquisition Proposal and copies of all material documents relating to
such Acquisition Proposal in accordance with its non-solicitation obligations under the Merger Agreement, (ii) Volcano has given Parent the three business days after the Determination Notice to propose revisions to the terms of the Merger
Agreement or make other proposals and has negotiated in good faith with Parent (and caused its representatives to negotiate with Parent) with respect to such proposed revisions or other proposals, if any, so that such Acquisition Proposal would
cease to constitute a Superior Offer and (iii) after considering the results of such negotiations and giving effect to the proposals made by Parent, if any, after consultation with outside legal counsel, the Volcano Board has determined, in
good faith, that such Acquisition Proposal is a Superior Offer and that the failure to make the Volcano Adverse Change Recommendation or |
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terminate the Merger Agreement to enter into a Specified Agreement would be inconsistent with the fiduciary duties of the Volcano Board to Volcanos stockholders under applicable legal
requirements; and |
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if Volcano intends to terminate the Merger Agreement to enter into a Specified Agreement, Volcano has complied with applicable termination provisions set forth in the Merger Agreement; or |
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if the decision to make a Volcano Adverse Change Recommendation in not in connection with an Acquisition Proposal: |
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a Change in Circumstance (as defined below) has occurred; |
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the Volcano Board determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the Volcano Board to Volcanos
stockholders under applicable legal requirements; |
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Volcano has given Parent a Determination Notice at least three business days prior to making any such Volcano Adverse Change Recommendation; and |
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(i) Volcano has specified in reasonable detail the Change in Circumstance and the reasons for the Volcano Adverse Change Recommendation, (ii) Volcano has given Parent the three business days after the
Determination Notice to propose revisions to the terms of the Merger Agreement or make other proposals and has negotiated in good faith with Parent (and caused its representatives to negotiate with Parent) with respect to such proposed revisions or
other proposals, if any, so that such Change in Circumstance would no longer necessitate a Volcano Adverse Change Recommendation and (iii) after considering the results of such negotiations and giving effect to the proposals made by Parent, if
any, after consultation with outside legal counsel, the Volcano Board has determined, in good faith, that the failure to make the Volcano Adverse Change Recommendation in response to such Change in Circumstance would be inconsistent with the
fiduciary duties of the Volcano Board to Volcanos stockholders under applicable legal requirements. |
For purposes of
the Merger Agreement, Change in Circumstance means any material event or development or material change in circumstances with respect to Volcano and its subsidiaries occurring or arising after the date of the Merger Agreement that
(i) was neither known to the Volcano Board nor reasonably foreseeable as of or prior to the date of the Merger Agreement nor known by the chief executive officer or chief financial officer of Volcano nor reasonably foreseeable as of or prior to
the date of the Merger Agreement and (ii) does not relate to (A) any Acquisition Proposal, (B) any events, changes or circumstances relating to Parent, Purchaser or any of their affiliates, (C) clearance of the Merger under
antitrust laws, (D) the fact, in and of itself, that Volcano meets or exceeds any internal or analysts expectations or projections for the results of operations for any period ending on or after the date of the Merger Agreement (provided
that the exception in clause (D) will not prevent or otherwise affect any such development or change underlying Volcano meeting or exceeding such metrics from being taken into account in determining whether a Change in Circumstance has
occurred), or (E) any changes after the date of the Merger Agreement in the market price or trading volume of the Shares (provided that the exception in clause (E) will not prevent or otherwise affect any such development or change
underlying such change in market price or trading value from being taken into account in determining whether a Change in Circumstance has occurred).
Filings, Consents and Approvals
Subject to the terms and conditions set forth in the Merger Agreement, each of the parties have agreed to use their respective reasonable best
efforts to take, or cause to be taken, all actions, to file, or cause to be filed, all documents and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable
antitrust laws to consummate and make effective the transactions contemplated by the Merger Agreement as soon as reasonably practicable, including (i) the obtaining of all
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necessary actions or nonactions, waivers, consents, clearances, decisions, declarations, approvals and, expirations or terminations of waiting periods from governmental bodies and the making of
all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval, clearance or waiver from, or to avoid an action or proceeding by, any governmental body in connection with any antitrust law;
(ii) the obtaining of all necessary consents, authorizations, approvals or waivers from third parties; and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by the Merger
Agreement.
The parties agreed to promptly take, and cause their affiliates to take, all reasonable actions and steps requested or
required by any governmental body as a condition to granting any consent, permit, authorization, waiver, clearance and approvals, and to cause the prompt expiration or termination of any applicable waiting period and to resolve such objections, if
any, as the Federal Trade Commission (the FTC) and the Department of Justice (the DOJ), or other governmental bodies of any other jurisdiction for which consents, permits, authorizations, waivers, clearances, approvals and
expirations or terminations of waiting periods are sought with respect to the transactions contemplated by the Merger Agreement, so as to obtain termination of the waiting period under the HSR Act or other antitrust laws, and to avoid the
commencement of a lawsuit by the FTC, the DOJ or other governmental bodies under antitrust laws, and to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order or other order in any suit or proceeding which
would otherwise have the effect of preventing the Closing or materially delaying the Offer Acceptance Time or the Closing or delaying the Offer Acceptance Time beyond the Expiration Date, provided that Volcano will only be required to take or commit
to take any such action, or agree to any such condition or restriction, if such action, commitment, agreement, condition or restriction is binding on Volcano only in the event the Closing occurs.
Subject to the terms and conditions of the Merger Agreement, each of the parties will (and will cause their respective affiliates, if
applicable, to): (i) promptly, but in no event later than ten business days after the date of the Merger Agreement, make an appropriate filing of all Notification and Report forms as required by the HSR Act with respect to the transactions
contemplated by the Merger Agreement; (ii) promptly make all other filings, notifications or other consents as may be required to be made or obtained by such party under foreign antitrust laws in certain identified jurisdictions; and
(iii) cooperate with each other in determining whether, and promptly preparing and making, any other filings, notifications or other consents are required to be made with, or obtained from, any other governmental bodies in connection with the
transactions contemplated by the Merger Agreement.
Prior to the earlier of the Offer Acceptance Time and the termination of the Merger
Agreement, each party will use its reasonable best efforts to (i) give the other parties prompt notice of the making or commencement of any request, inquiry, investigation, action or legal proceeding brought by a governmental body or brought by
a third party before any governmental body, in each case, with respect to the transactions contemplated by the Merger Agreement, (ii) keep the other parties reasonably informed as to the status of any such request, inquiry, investigation,
action or legal proceeding, (iii) promptly inform the other parties of any communication to or from the FTC, DOJ or any other governmental body in connection with any such request, inquiry, investigation, action or legal proceeding,
(iv) promptly furnish to the other party, subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants, with copies of documents provided to or received from any governmental body in connection with
any such request, inquiry, investigation, action or legal proceeding (other than 4(c) documents as that term is used in the rules and regulations under the HSR Act), (v) subject to an appropriate confidentiality agreement to limit
disclosure to counsel and outside consultants, and to the extent reasonably practicable, consult and cooperate with the other parties and will consider in good faith the views of the other parties in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or submitted in connection with any such request, inquiry, investigation, action or legal proceeding, and (vi) except as may be prohibited by any governmental body or by any
legal requirement, in connection with any such request, inquiry, investigation, action or legal proceeding in respect of the transactions contemplated by the Merger Agreement, each party will permit authorized representatives of the other party to
be present at each meeting or conference relating to such request, inquiry, investigation, action or legal proceeding and to have access to and be consulted in connection with any argument, opinion or proposal made or submitted to any governmental
body in connection with such request, inquiry, investigation, action or legal proceeding.
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Each party will supply as promptly as practicable such information, documentation, other material or testimony that may be requested by any governmental body, including by complying at the
earliest reasonably practicable date with any request for additional information, documents or other materials received by any party or any of their respective subsidiaries from any governmental body in connection with such applications or filings
or the transactions contemplated by the Merger Agreement. Parent and Volcano will have the right to review in advance, and to the extent practicable each will consult the other on, all the information relating to Parent or Volcano, as the case may
be, and any of their respective subsidiaries that appear in any filing made with, or written materials submitted to, any third party and/or any governmental body in connection with the Offer and the transactions contemplated by the Merger Agreement
and will incorporate all comments reasonably proposed by Parent or Volcano, as the case may be; provided, however, that with respect to any documents or materials required to be filed under the HSR Act, or other laws of any other applicable
jurisdiction that contain information that is confidential or proprietary to the providing party (including any so called 4(c) or 4(d) documents), such information will be provided solely to those individuals acting as outside antitrust counsel for
the other parties; provided that such counsel will not disclose such information to such other parties and will enter into a joint defense agreement with the providing party; provided further that, the individuals acting as outside antitrust counsel
for Volcano may redact from such information any information related to Volcanos transaction process, including third party bidders, third party offers, financial advice and the value of the transactions contemplated by the Merger Agreement.
Nothing in the Merger Agreement will require, or be construed to require, Parent or any of its affiliates to proffer to, or agree
(i) to, sell, divest, lease, license, transfer, dispose of or otherwise encumber, (ii) to hold separate and agree to sell, divest, lease, license, transfer, dispose of or otherwise encumber before or after the Offer Acceptance Time or the
Effective Time, any assets, licenses, operations, rights, product lines, businesses or interest therein of Parent, Volcano or any of their respective affiliates (or to consent to any sale, divestiture, lease, license, transfer, disposition or other
encumbrance by Volcano of any of its assets, licenses, operations, rights, product lines, businesses or interest therein or to any agreement by Volcano to take any of the foregoing actions) or (iii) to agree to any material changes (including,
without limitation, through a licensing arrangement) or restriction on, or other impairment of Parents ability to own or operate, any such assets, licenses, operations, rights, product lines, businesses or interests therein or Parents
ability to vote, transfer, receive dividends or otherwise exercise full ownership rights with respect to the capital stock of Volcano or the Surviving Corporation, except for proffers and agreements to amend or modify contracts between Volcano
and/or its subsidiaries and third parties or sell, divest, lease, license, transfer, dispose or otherwise encumber, or to agree to changes, restrictions or other impairments with respect to, any of Parents or Volcanos (or their
respective affiliates) assets, licenses, operations, rights, product lines, businesses or interest therein, where such amended, sold, divested, leased, licensed, transferred, disposed or encumbered contracts, assets, licenses, operations,
rights, product lines, businesses and interests in the aggregate have not accounted for more than $20 million of the parties and their respective affiliates gross revenues for the 12 months ending September 30, 2014; provided,
that Parent is entitled to compel Volcano or its subsidiaries to take any of the actions referred to above (or agree to take such actions) if such actions are only effective after the Effective Time.
Employee Matters; Employee Benefits
As soon as reasonably practicable following the date of the Merger Agreement and in any event prior to the Offer Acceptance Time, Volcano will
take all actions (including obtaining any necessary determinations and/or resolutions of the Volcano Board or a committee thereof) that may be necessary (under the Volcano Equity Plans and award agreements pursuant to which Volcano Options and
Volcano RSUs are outstanding or otherwise) for (i) the acceleration of vesting and exercisability (as applicable) of all unexercised Volcano Options and all Volcano RSUs then outstanding, in each case effective immediately prior to the Offer
Acceptance Time, (ii) the cancellation of the Volcano Options and Volcano RSUs as contemplated in the Merger Agreement, respectively, and the subsequent payment of the Merger Consideration in respect of the Volcano Options and Volcano RSUs
pursuant to the Merger Agreement and (iii) the termination of each Volcano Equity Plans immediately prior to the Effective Time.
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As soon as reasonably practicable following the date of the Merger Agreement and in any event
prior to the Offer Acceptance Time, Volcano will take all actions necessary or required under the ESPP and legal requirements (including obtaining any necessary determinations and/or resolutions of the Volcano Board or a committee thereof and, if
appropriate, amending the terms of the ESPP) to provide that: (i) except for the six month offering period under the ESPP that commenced on September 1, 2014 (the Final Offering), no offering period will be authorized or
commence on or after the date of the Merger Agreement, (ii) if the Offer Acceptance Time occurs prior to the scheduled end of the Final Offering, each individual participating in the Final Offering pursuant to the terms of the ESPP will receive
notice of the transactions contemplated by the Merger Agreement prior to the Offer Acceptance Time and will have an opportunity to withdraw from the ESPP and terminate his or her outstanding purchase rights under the terms of the ESPP prior to the
end of the Final Offering, (iii) as required by the terms of the ESPP, the Final Offering will end within the ten business day period that immediately precedes the Offer Acceptance Time, (iv) with respect to each ESPP participant who has
not withdrawn from the ESPP prior to the end of the Final Offering such participants accumulated contributions under the ESPP will be used to purchase Shares in accordance with the ESPP as of the end of the Final Offering, (v) the
applicable purchase price for Shares purchased under the ESPP will be determined in accordance with the formula set forth in the ESPP as of the date of the Merger Agreement and (vi) the ESPP will terminate in its entirety following the purchase
of Shares as of the end of the Final Offering and no further rights shall be granted or exercised under the ESPP thereafter.
For a period
of one year following the Effective Time, Parent will provide, or cause to be provided, to those employees of Volcano and its subsidiaries who are employed by Volcano and its subsidiaries as of immediately prior to the Effective Time and who
continue to be actively employed by the Surviving Corporation (or any affiliate thereof) during such one-year period (the Continuing Employees) base salary and base wages, short-term cash incentive compensation and commission
opportunities and benefits (including severance benefits, but excluding equity-based compensation, retention and performance bonus opportunities (including but not limited to bonuses granted in connection with prior acquisitions by Volcano and its
subsidiaries) and any long-term deferred cash award) that are substantially comparable in the aggregate to such base salary and base wages, short-term cash incentive compensation opportunities (including performance bonus awards for 2014 performance
under bonus plans that were adopted prior to the execution of the Merger Agreement) and benefits (including certain severance benefits, but excluding equity-based compensation, retention and performance bonus opportunities (including but not limited
to bonuses granted in connection with prior acquisitions by Volcano and its subsidiaries) and any long-term deferred cash award) provided to such Continuing Employees immediately prior to the execution of the Merger Agreement.
With respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the personal,
sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, Parent will, or will cause the Surviving Corporation to and instruct its affiliates to, as applicable (and without duplication of benefits),
assume the liability for such accrued personal, sick or vacation time and allow such Continuing Employee to use such accrued personal, sick or vacation time in accordance with the practice and policies of Volcano and its subsidiaries.
Parent agreed that all Continuing Employees will be eligible to continue to participate in the Surviving Corporations health and welfare
benefit plans (to the same extent such Continuing Employees were eligible to participate under Volcanos health and welfare benefit plans immediately prior to the Effective Time); provided, however, that (i) nothing in the Merger Agreement
will limit the right of Parent or the Surviving Corporation to amend or terminate any such health or welfare benefit plan at any time and (ii) if Parent or the Surviving Corporation terminates any such health or welfare benefit plan, then (upon
expiration of any appropriate transition period), the Continuing Employees will be eligible to participate in the Surviving Corporations health and welfare benefit plans to the extent that it would not result in a duplication of benefits and
to the extent that coverage under such plans is replacing comparable coverage under an employee benefit plan in which such Continuing Employee participated immediately before the Effective Time. To the extent that service is relevant for
eligibility, vesting or allowances (including paid time off) under any health or welfare benefit plan of Parent
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and/or the Surviving Corporation, then Parent will use its commercially reasonable efforts to ensure that such health or welfare benefit plan will, for purposes of eligibility, vesting and
allowances (including paid time off) but not for purposes of benefit accrual, credit Continuing Employees for service prior to the Effective Time with Volcano to the same extent it would not result in a duplication of benefits and to the extent that
such service was recognized prior to the Effective Time under the corresponding health or welfare benefit plan of Volcano. Nothing in the Merger Agreement will be construed to create a right in any employee to employment with Parent, the Surviving
Corporation or any other affiliate of the Surviving Corporation and the employment of each Continuing Employee shall be at will employment.
Contingent upon, the date on which the Closing occurs (the Closing Date), Volcano will take all necessary actions to terminate the
Volcano 401(k) Plan, with such termination effective as of the date immediately preceding the Closing Date. Volcano will provide Parent with a copy of any resolutions or other corporate action (the form and substance of which shall be subject to
review and approval by Parent, with such approval not to be unreasonably withheld, conditioned or delayed) evidencing that the Volcano 401(k) Plan will be terminated effective as of the date immediately preceding the Closing Date, contingent upon
the Closing Date, and will adopt any necessary amendments to the Volcano 401(k) Plan to effect such termination. Prior to and conditioned upon termination of the Volcano 401(k) Plan, Volcano will take any action necessary to fully vest any and all
unvested amounts of the accounts of all participants in the Volcano 401(k) Plan that are impacted by such termination. Continuing Employees will be permitted to make eligible rollover contributions to the Parent 401(k) Plan (in cash and promissory
notes evidencing loans) as soon as practicable following the Closing Date.
Indemnification of Officers and Directors
All rights to indemnification by Volcano existing in favor of the directors and officers of Volcano as of the date of the Merger Agreement (the
Indemnified Persons) for their acts and omissions occurring prior to the Effective Time, as provided in Volcanos certificate of incorporation and bylaws (as in effect as of the date of the Merger Agreement) and as provided in the
indemnification agreements between Volcano and the Indemnified Persons (as in effect as of the date of the Merger Agreement) in the forms made available by Volcano to Parent or Parents representatives, will survive the Merger for a period of
six years from the Effective Time, and any claim made requesting indemnification pursuant to such indemnification rights within such six-year period will continue to be subject to the indemnification rights provided under the Merger Agreement until
disposition of such claim.
From the Effective Time until the sixth anniversary of the date on which the Effective Time occurs, Parent and
the Surviving Corporation (together with their successors and assigns, the Indemnifying Parties) will, to the fullest extent permitted under applicable legal requirements, indemnify and hold harmless each Indemnified Person in his or her
capacity as an officer or director of Volcano against all losses, claims, damages, liabilities, fees, expenses, judgments or fines incurred by such Indemnified Person as an officer or director of Volcano in connection with any pending or threatened
legal proceeding based on or arising out of, in whole or in part, the fact that such Indemnified Person is or was a director or officer of Volcano at or prior to the Effective Time and pertaining to any and all matters pending, existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, including any such matter arising under any claim with respect to the transactions contemplated by the Merger Agreement. From the Effective Time
until the sixth anniversary of the date on which the Effective Time occurs, the Indemnifying Parties will also, to the fullest extent permitted under applicable legal requirements, advance reasonable and documented out-of-pocket costs and expenses
(including reasonable and documented attorneys fees) incurred by the Indemnified Persons in connection with matters for which such Indemnified Persons are eligible to be indemnified pursuant to the Merger Agreement within a reasonable period
after receipt by Parent of a written request for such advance, subject to the execution by such Indemnified Persons of appropriate undertakings in favor of the Indemnifying Parties to repay such advanced costs and expenses if it is ultimately
determined that such Indemnified Person is not entitled to be indemnified under the Merger Agreement.
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At or prior to the Effective Time, Volcano may (through a nationally recognized insurance broker
approved by Parent (such approval not to be unreasonably withheld, delayed or conditioned)), and if Volcano does not, the Surviving Corporation will, purchase a six-year prepaid tail policy on terms and conditions with respect to
coverage, deductibles and amounts no less favorable in the aggregate than the existing policy of directors and officers liability insurance and fiduciary liability insurance maintained by Volcano with respect to acts and omissions
occurring prior to the Effective Time as of the date of the Merger Agreement; provided, however, that in no event will the cost of such tail policy exceed an amount in excess of 250% of the annual premium currently payable by Volcano
with respect to directors and officers liability insurance and fiduciary liability insurance, it being understood that if the cost of such tail policy exceeds such amount, Parent will be obligated to cause the Surviving
Corporation to obtain a policy with the greatest coverage available for a cost equal to such amount.
In the event Parent or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then, and in each such case, Parent will ensure that the successors and assigns of Parent or the Surviving Corporation, as the case may be, or at Parents option, Parent, will assume
the indemnification obligations described above.
Takeover Laws
If any state takeover law may become, or may purport to be, applicable to the transactions contemplated by the Merger Agreement, each of Parent
and Volcano and the members of their respective boards of directors will use their respective reasonable best efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated by the Merger Agreement may be
consummated as promptly as practicable on the terms and conditions contemplated thereby and otherwise act to lawfully eliminate the effect of any takeover law on any of the transactions contemplated by the Merger Agreement.
Rule 14d-10(d) Matters
Prior to the Offer Acceptance Time, the compensation committee of the Volcano Board, at a meeting duly called and held, will approve, as an
employment compensation, severance or other employee benefit arrangement within the meaning of Rule 14d-10(d)(2) under the Exchange Act, each agreement, arrangement or understanding between Purchaser, Volcano or their
respective affiliates and any of the officers, directors or employees of Volcano that are effective as of the date of the Merger Agreement or are entered into after the date of the Merger Agreement and prior to the Offer Acceptance Time pursuant to
which compensation is paid to such officer, director or employee and will take all other action reasonably necessary to satisfy the requirements of the non-exclusive safe harbor set forth in Rule 14d-10(d)(2) under the Exchange Act.
Treatment of Convertible Notes
To the extent required pursuant to the indenture (the Indenture) dated September 20, 2010 by and between the Company and Wells
Fargo Bank, N.A., as trustee, as supplemented by the Supplemental Indenture dated September 20, 2010 by and between the Company and Wells Fargo Bank, N.A., as trustee with respect to Volcanos 2.875% Convertible Notes due 2015 (the
Volcano 2015 Convertible Notes), and the Second Supplemental Indenture dated December 10, 2012 between the Company and Wells Fargo Bank, N.A., as trustee with respect to Volcanos 1.75% Convertible Notes due 2017 (the
Volcano 2017 Convertible Notes and together with the Volcano 2015 Convertible Notes, the Volcano Convertible Notes), Volcano, the Surviving Corporation and Parent will take all necessary action to execute and deliver a
supplemental indenture to the Trustee (as defined in the Indenture) to the Indenture, effective upon the Effective Time, to provide, among other things, that on and after the Effective Time, each holder of Convertible Notes will have the right to
convert such Convertible Notes into the conversion consideration determined by reference to the consideration receivable upon consummation of the Merger in respect of each Share in accordance with, and subject to, the provisions of
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the Supplemental Indentures governing the conversions of the Convertible Notes issued thereunder (including any applicable increase in the Conversion Rate) in each case in accordance
with, and subject to, the Indenture (including without limitation the time periods specified therein). In addition, Volcano and the Surviving Corporation will take commercially reasonable efforts to take all such actions as may be required in
accordance with, and subject to, the terms of the Indenture (including without limitation the time periods specified therein), including the giving of any notices that may be required in connection with any repurchases or conversions of the
Convertible Notes occurring as a result of the transactions contemplated by the Merger Agreement constituting a Fundamental Change and/or Make-Whole Fundamental Change as such terms are defined in the Supplemental Indentures,
and delivery of any supplemental indentures, legal opinions, officers certificates or other documents or instruments required in connection with the consummation of the Merger. Volcano will not make any settlement election under the
Supplemental Indenture relating to the Convertible Notes without the prior written consent of Parent, which consent will not be unreasonably withheld or delayed. Volcano will provide Parent, Purchaser and their counsel reasonable opportunity to
review and comment on any written notice or communication to or with holders of Convertible Notes or with the Trustee under the Indenture prior to the dispatch or making thereof, and Volcano will give reasonable and good faith consideration to any
comment made by Parent, Purchaser or their counsel.
Other Covenants
The Merger Agreement contains other customary covenants, including covenants relating to securityholder litigation, public announcements and
access, confidentiality, matters with respect to Section 16 of the Exchange Act and the rules and regulations thereunder, stock exchange delisting and deregistration and assumption of certain obligations.
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time:
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by mutual written consent of Parent and Volcano at any time prior to the Offer Acceptance Time; |
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by either Parent or Volcano if the Offer has expired without the acceptance for payment of Shares pursuant to the Offer; provided, however, that neither party will be permitted to terminate the Merger Agreement pursuant
to this provision if a breach by such party of any provision of the Merger Agreement has proximately caused the failure of the acceptance for payment of Shares pursuant to the Offer (an Expiration Date Termination); |
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by either Parent or Volcano if a court of competent jurisdiction or other governmental body has issued an order, decree or ruling, or has taken any other action, having the effect of permanently restraining, enjoining
or otherwise prohibiting the acceptance for payment of Shares pursuant to the Offer or the Merger or making consummation of the Offer or the Merger illegal, which order, decree, ruling or other action is final and nonappealable; provided, however,
that neither party will be permitted to terminate the Merger Agreement pursuant to this provision if a breach by such party of any provision of the Merger Agreement has proximately caused the issuance of such final and non-appealable order, decree
or ruling; |
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by Parent at any time prior to the Offer Acceptance Time, if, whether or not permitted to do so: (i) Volcano, the Volcano Board or any committee
thereof has made a Volcano Adverse Change Recommendation; (ii) Volcano, the Volcano Board or any committee thereof has adopted, approved, recommended, submitted to stockholders, declared advisable, executed or entered into (or resolved,
determined or proposed to adopt, approve, recommend, submit to stockholders, declare advisable, execute or enter into) any Alternative Acquisition Agreement (other than an acceptable confidentiality agreement entered into pursuant to the
non-solicitation obligations set forth in the Merger Agreement); or (iii) the Volcano Board fails to publicly reaffirm the Volcano Board Recommendation (A) within ten business days after receipt of a written request by Parent to provide
such reaffirmation in the absence |
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of an Acquisition Proposal, provided that, unless an Acquisition Proposal has been publicly disclosed, Parent may only make such request once every 30 days, (B) in the case of a tender offer
or exchange offer subject to Regulation 14D under the Exchange Act, the Volcano Board fails to reaffirm the Volcano Board Recommendation and recommend, in a Solicitation/Recommendation Statement on Schedule 14D-9, rejection of such tender offer or
exchange offer within ten business days of the commencement of such tender offer or exchange offer; or (C) within five business days after receipt of a written request by Parent to provide such reaffirmation following public disclosure of an
Acquisition Proposal other than a commenced tender offer or commenced exchange offer (each of clauses (i), (ii) and (iii) above, an Adverse Change Recommendation Termination); |
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by either Parent or Volcano if the Offer Acceptance Time has not occurred on or prior to the close of business on the End Date; provided, however, that neither party will be permitted to such termination if a breach by
it of any provision of the Merger Agreement has proximately caused the failure of the Offer Acceptance Time to have so occurred (an End Date Termination); |
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by Volcano, at any time prior to the Offer Acceptance Time, in order to accept a Superior Offer and enter into a binding written definitive acquisition agreement providing for the consummation of a transaction
constituting a Superior Offer (a Specified Agreement), if (i) Volcano has complied in all material respects with its non-solicitation and recommendation obligations set forth in the Merger Agreement, (ii) the Volcano Board,
after satisfying all of its non-solicitation and recommendation obligations set forth in the Merger Agreement, has authorized Volcano to enter into such Specified Agreement and (iii) in connection with such termination, Volcano pays the
Termination Fee (as defined below) due to Parent (a Superior Offer Termination); |
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by Parent at any time prior to the Offer Acceptance Time, if a breach of any representation or warranty contained in the Merger Agreement or failure to perform any covenant or obligation in the Merger Agreement on the
part of Volcano has occurred such that certain specified Offer Conditions would not be satisfied and cannot be cured by Volcano by the End Date, or if capable of being cured, has not been cured within 15 days of the date Parent gives Volcano notice
of such breach or failure to perform; provided, however, that, Parent will not have the right to terminate the Merger Agreement pursuant to this provision if either Parent or Purchaser is then in material breach of any representation, warranty,
covenant or obligation under the Merger Agreement such that Volcano has the right to terminate this Agreement as described in the following bullet; or |
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by Volcano at any time prior to the Offer Acceptance Time, if a breach in any material respect of any representation or warranty contained in the Merger Agreement or failure to perform in any material respect any
covenant or obligation in the Merger Agreement on the part of Parent or Purchaser has occurred, in each case if such breach or failure has had or would reasonably be expected to prevent Parent or Purchaser from consummating the transactions
contemplated by the Merger Agreement and such breach or failure cannot be satisfied and cannot be cured by Parent or Purchaser, as applicable, by the End Date, or if capable of being cured, has not been cured within 15 days of the date Volcano gives
Parent notice of such breach or failure to perform; provided, however, that, Volcano will not have the right to terminate the Merger Agreement pursuant to this provision if Volcano is then in material breach of any representation, warranty covenant
or obligation under the Merger Agreement such that Parent has the right to terminate the Merger Agreement as described in the immediately preceding bullet. |
Effects of Termination
In the event of the termination of the Merger Agreement, written notice thereof will be given to the other party or parties, specifying the
provision of the Merger Agreement pursuant to which such termination is made, and the Merger Agreement will be of no further force or effect and there will be no liability on the part of Parent, Purchaser or Volcano or their respective
representatives, stockholders and affiliates following any such termination; provided, however, that (i) the confidentiality agreement between Volcano and Royal Philips will
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survive the termination of the Merger Agreement and will remain in full force and effect in accordance with its terms; and (ii) subject to certain limitations, the termination of the Merger
Agreement will not relieve any party from any liability for any willful and material breach of the Merger Agreement prior to the date of termination.
Termination Fees
A
termination fee of $29,000,000 (the Termination Fee) will be payable by Volcano if the Merger Agreement is terminated under one of the following circumstances:
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by Volcano pursuant to a Superior Offer Termination; |
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by Parent pursuant to an Adverse Change Recommendation Termination; or |
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(i) by either Parent or Volcano pursuant to an Expiration Date Termination or an End Date Termination; (ii) any person has publicly disclosed a bona fide Acquisition Proposal after the date of the Merger
Agreement and prior to such termination (unless irrevocably, in good faith and publicly withdrawn prior to such termination); and (iii) within 12 months of such termination, Volcano enters into a definitive agreement with respect to an
Acquisition Proposal or consummates an Acquisition Proposal (provided that references to 20% in the definition of Acquisition Proposal are deemed to be references to 50%). |
Volcano will pay to Parent or its designee the Termination Fee by wire transfer of same day funds (i) in the case of termination
described in the second bullet above, within two business days after such termination, (ii) prior to such termination if in the case of termination described in the first bullet above or (iii) in the case of termination described in the
third bullet above, upon the earlier to occur of two business days after entry into a definitive agreement with respect to an Acquisition Proposal or prior to the consummation of the Acquisition Proposal referred to therein. In the event that the
Termination Fee becomes payable and Volcano pays the Termination Fee to Parent in accordance with the Merger Agreement, Parents receipt of the Termination Fee and the payment of certain other amounts that may be due in the event Volcano does
not timely pay the Termination Fee in accordance with the terms of the Merger Agreement will constitute the sole and exclusive remedy of Parent, Purchaser or any of their respective affiliates under the Merger Agreement, and upon payment of such
amount(s), none of Volcano, its subsidiaries or any of their respective, former, current or future officers, directors, partners, stockholders, optionholders, managers, members or affiliates will have any further liability or obligation relating to
or arising out of the Merger Agreement or the transactions contemplated thereby.
Specific Performance
The parties are entitled to an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce specifically the terms and
provisions thereof in the courts described therein, this being (subject to the provisions relating to the payment of the Termination Fee) in addition to any other remedy to which they are entitled under law or equity.
Fees and Expenses
Except
as provided in this Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementTermination Fees, all fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated
thereby will be paid by the party incurring such expenses, whether or not the Offer and Merger are consummated.
Governing Law
The Merger Agreement is governed by Delaware law.
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Guarantee
On December 16, 2014, in connection with the execution and delivery of the Merger Agreement, Royal Philips executed and delivered to
Volcano a Guarantee, pursuant to which Royal Philips guaranteed the full and timely performance by Parent and Purchaser of their respective obligations under the Merger Agreement.
Consulting Agreement with R. Scott Huennekens
In connection with the execution of the Merger Agreement, R. Scott Huennekens, President and Chief Executive Officer of Volcano entered into a
consulting agreement with Purchaser which will become effective upon the Effective Time (the Consulting Start Date). Upon the Consulting Start Date, Mr. Huennekens will become a consultant of Purchaser and will cease to be an
employee of Volcano. At such time, pursuant to the terms of Mr. Huennekenss existing employment agreement with Volcano, Mr. Huennekens will receive a cash severance payment equal to (i) the greater of (a) four times annual
base salary or (b) two times annual base salary plus two times the highest bonus received in the two years prior to the Consulting Start Date, plus (ii) a pro-rata bonus for the year in which the Consulting Start Date occurs if a cash
bonus would otherwise have been earned and payable for such year based on actual performance, plus (iii) two years of premiums for the costs of continuing life and disability insurance coverage following termination. Additionally, Purchaser
will also pay the continued group health insurance premiums on behalf of Mr. Huennekens and his eligible dependents for a period of 24 months following the Consulting Start Date.
Pursuant to the terms of Mr. Huennekenss new consulting agreement with Purchaser, Mr. Huennekens will be engaged as a
consultant of Purchaser for an initial term of five months and shall receive a monthly fee of $100,000 in consideration for the consulting services rendered to Purchaser over such term. Upon expiration of the initial term, Mr. Huennekens and
Purchaser may agree to extend the period during which Mr. Huennekens will provide consulting services to Purchaser, with such other terms of the consulting relationship as may be mutually agreed by the parties from time to time.
Retention Agreements
In
connection with the execution of the Merger Agreement, Joseph Burnett, Executive Vice President and General Manager, Coronary and Systems Business Unit of Volcano, entered into a retention agreement with Purchaser which will become effective upon
the Effective Time (the Retention Start Date), and at such time, terminate and supersede Mr. Burnetts existing entitlements under Volcanos Officer Change in Control Severance Benefit Plan. Subject to the terms of the new
retention agreement, Mr. Burnett will be eligible to receive a cash retention bonus if he remains employed by Purchaser through the second anniversary of the Retention Start Date.
Under the new retention agreement with Purchaser, in the event that Mr. Burnetts employment is terminated by Purchaser without
cause prior to the second anniversary of the Retention Start Date or in the event that Mr. Burnett resigns with good reason prior to the second anniversary of the Retention Start Date, he will receive a lump sum cash
payment equal to the cash severance that he would have received upon a qualifying termination of employment under Volcanos Officer Change in Control Severance Benefit Plan, as well as reimbursement for continued group health insurance coverage
for a period of up to 18 months following such termination. In consideration for these benefits, Mr. Burnett will be subject to customary restrictive covenants during his employment and for a 12 month period thereafter, including
non-competition and non-solicitation of employees and customers.
Confidentiality Agreement
The following summary description of the Confidentiality Agreement is qualified in its entirety by reference to such Confidentiality Agreement,
which has been filed as Exhibit (d)(2) to the Schedule TO, which you may examine and copy as set forth in Section 8 Certain Information Concerning Purchaser Parent and Royal Philips above.
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On June 23, 2014, Royal Philips and Volcano entered into the Confidentiality Agreement.
Under the terms of the Confidentiality Agreement, Royal Philips agreed, subject to certain exceptions, to keep confidential certain non-public information relating to Volcano in connection with a possible transaction with Volcano. The
Confidentiality Agreement also includes a standstill provision that was subject to certain exceptions.
12. |
Purpose of the Offer; Plans for Volcano. |
Purpose of the Offer
We are making the Offer pursuant to the Merger Agreement in order to acquire control of, and ultimately following the Merger, the entire equity
interest in, Volcano while allowing Volcanos stockholders an opportunity to receive the Offer Price promptly by tendering their Shares pursuant to the Offer. The Merger will be governed by Section 251(h) of the DGCL. Accordingly, Parent,
we and Volcano have agreed to take all necessary and appropriate action to cause the Merger to become effective immediately following the Offer Acceptance Time without a meeting of the stockholders of Volcano in accordance with Section 251(h)
of the DGCL, subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement.
Holders of Shares who
tender their Shares pursuant to the Offer will cease to have any equity interest in Volcano and will no longer participate in the future growth of Volcano. If the Merger is consummated, the current holders of Shares will no longer have an equity
interest in Volcano and instead will only have the right to receive an amount in cash equal to the Offer Price or, to the extent that holders of Shares are entitled to and have properly demanded appraisal in connection with the Merger, the amounts
to which such holders of Shares are entitled in accordance with Delaware law.
Plans for Volcano
The Merger Agreement provides that, following the Offer Acceptance Time and subject to the conditions set forth in the Merger Agreement, we
will be merged with and into Volcano and that, following the Merger and until thereafter amended, (i) the certificate of incorporation of the Surviving Corporation will be amended and restated as of the Effective Time to conform to our
certificate of incorporation as in effect immediately prior to the Effective Time, and (ii) the bylaws of the Surviving Corporation will be amended and restated as of the Effective Time to conform to our bylaws as in effect immediately prior to the
Effective Time. See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementCertificate of Incorporation; Bylaws.
From and after the Effective Time, until successors are duly elected and qualified in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation, our directors and officers immediately prior to the Effective Time will be the directors and officers of the Surviving Corporation immediately following the Effective Time. See Section 11
The Merger Agreement; Other AgreementsThe Merger AgreementChanges of Directors and Officers in Connection with the Offer and the Merger.
Except as otherwise disclosed in this Offer to Purchase, we do not have any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation, or sale or transfer of a material amount of assets, involving Volcano or any of its subsidiaries, any material changes in Volcanos present dividend policy, indebtedness,
capitalization, corporate structure, business or any material change to the composition of Volcanos management or board of directors. We will continue to evaluate and review Volcano and its business, assets, corporate structure,
capitalization, operations, properties, policies, management and personnel with a view towards determining how to optimally realize any potential benefits which arise from the relationship of the operations of Volcano with those of other business
units of Philips. Such evaluation and review is ongoing and is not expected to be completed until after the consummation of the offer and the merger. If, as, and to the extent that, Philips acquires control of Volcano, Philips will complete such
evaluation and review of Volcano and will determine what, if any, changes would be desirable in light of the circumstances. Such changes could include, among other things, restructuring Volcano through changes in
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Volcanos business, corporate structure, articles of incorporation, bylaws, capitalization or management or could involve consolidating and streamlining certain operations and reorganizing
other businesses and operations. We intend to work with Volcanos management as part of a comprehensive review of Volcanos business, operations, capitalization and management with a view to optimizing development of Volcanos
potential.
13. |
Certain Effects of the Offer. |
Market for Shares. If the Offer is successful,
there will be no market for the Shares because, subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, we, Parent and Volcano intend to consummate the Merger immediately following the Offer Acceptance Time.
NASDAQ Listing. The Shares are currently listed on NASDAQ. Immediately following the consummation of the Merger (which is expected to
occur immediately following the Offer Acceptance Time), the Shares will no longer meet the requirements for continued listing on NASDAQ because Parent will be the only stockholder. NASDAQ requires, among other things, that any listed shares of
common stock have at least 400 total stockholders. Immediately following the consummation of the Merger, we intend and will cause Volcano to delist the Shares from NASDAQ.
Exchange Act Registration. The Shares are currently registered under the Exchange Act. As a result, Volcano currently files periodic
reports on account of the Shares. Subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, we, Parent and Volcano will consummate the Merger immediately following the Offer Acceptance Time, following which
the Shares will no longer be publicly owned. Following the consummation of the Merger, we intend to take steps to cause the termination of the registration of Shares under the Exchange Act as promptly as practicable and expect to take steps to cause
the suspension of all of Volcanos reporting obligations under the Exchange Act. Pursuant to the rules of the SEC and the views expressed by the SEC staff, Volcano may terminate its Exchange Act registration and suspend its reporting
obligations on account of the Shares if (i) the outstanding Shares are not listed on a national securities exchange, (ii) there are fewer than 300 holders of record of Shares and (iii) Volcano is not otherwise required to furnish or
file reports under the Exchange Act.
Margin Regulations. The Shares are currently margin securities under the
regulations of the Federal Reserve Board, which has the effect, among other things, of allowing brokers to extend credit using the Shares as collateral. Following the Offer (and prior to the Effective Time), the Shares may no longer constitute
margin securities for the purposes of the margin regulations of the Federal Reserve Board, in which event the Shares would be ineligible as collateral for margin loans made by brokers.
14. |
Dividends and Distributions. |
As described in Section 11 The
Merger Agreement; Other AgreementsThe Merger AgreementConduct of Business of Volcano, the Merger Agreement provides that, from the date of the Merger Agreement until the earlier of the Effective Time or the termination of the
Merger Agreement pursuant to its terms, except as expressly required by the Merger Agreement, as required by applicable legal requirements, or otherwise with the prior written consent of Parent (which consent will not be unreasonably withheld,
delayed or conditioned), Volcano will not, and will not permit any of its subsidiaries to establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock,
except dividends and distributions paid or made to Volcano by its wholly owned subsidiaries.
15. |
Conditions to the Offer. |
Notwithstanding any other provisions of the Offer or the
Merger Agreement, we will not be required to accept for payment, (subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act) pay for, and may delay the acceptance for payment of, or (subject to any
such rules and
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regulations) the payment for, any tendered Shares and, to the extent permitted by the Merger Agreement, may terminate the Offer: (i) upon termination of the Merger Agreement; and
(ii) at any scheduled Expiration Date (subject to any extensions of the Offer pursuant to the Merger Agreement) or amend the Offer as otherwise permitted by the Merger Agreement, if:
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the Minimum Condition has not been satisfied by the Expiration Date; |
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(i) the representations and warranties of Volcano set forth in Sections 3.3(a), 3.3(c) (first sentence), 3.3(d) and 3.3(e) (Capitalization, Etc.) of the Merger Agreement were not accurate in all respects as of the date
of the Merger Agreement and are not accurate in all respects at and as of the Offer Acceptance Time as if made on and as of such time, except (other than a result of a willful breach by Volcano) where the failure to be so accurate in all respects
would result in additional cost, expense or liability to Volcano, Parent and their affiliates, individually or in the aggregate, that is more than $2,000,000 (it being understood that, for purposes of determining the accuracy of such representations
and warranties, (A) all Material Adverse Effect qualifications and other materiality qualifications contained in such representations and warranties will be disregarded and (B) the accuracy of those representations or
warranties that address matters only as of a specific date will be measured only as of such date); (ii) the representations and warranties of Volcano set forth in Sections 3.3 (Capitalization, Etc.) (other than Sections 3.3(a), 3.3(c) (first
sentence), 3.3(d) and 3.3(e)), 3.20 (Authority; Binding Nature of Agreement), 3.21 (Section 203 of the DGCL Not Applicable; Takeover Statutes), 3.22 (Merger Approval), 3.24 (Rights Agreement), 3.25 (Fairness Opinion) and 3.26 (Financial Advisor) of
the Merger Agreement were not accurate in all material respects as of the date of the Merger Agreement, and are not accurate in all material respects at and as of the Offer Acceptance Time as if made on and as of such time (it being understood that,
for purposes of determining the accuracy of such representations and warranties, (A) all Material Adverse Effect qualifications and other materiality qualifications contained in such representations and warranties will be
disregarded and (B) the accuracy of those representations or warranties that address matters only as of a specific date will be measured only as of such date); (iii) the representations and warranties of Volcano set forth in clause
b of the first sentence of Section 3.5 (Absence of Changes) were not accurate in all respects as of the date of the Merger Agreement and are not accurate in all respects at and as of the Offer Acceptance Time as if made on and as of
such time; (iv) the representations and warranties of Volcano set forth in the Merger Agreement (other than those referred to in clauses (i), (ii) or (iii)) above) were not accurate in all respects as of the
date of the Merger Agreement, and are not accurate in all respects at and as of the Offer Acceptance Time as if made on and as of such time, except that any inaccuracies will be disregarded if the circumstances giving rise to all such inaccuracies
(considered collectively) do not collectively constitute, and would not reasonably be expected collectively to have, a Material Adverse Effect (it being understood that, for purposes of determining the accuracy of such representations and
warranties, (A) all Material Adverse Effect qualifications and other materiality qualifications contained in such representations and warranties will be disregarded and (B) the accuracy of those representations or warranties
that address matters only as of a specific date will be measured only as of such date); |
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Volcano has not complied with or performed in all material respects all of its covenants and agreements it is required to comply with or perform at or prior to the Offer Acceptance Time; |
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since the date of the Merger Agreement, there has been any Material Adverse Effect; |
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the Antitrust Condition has not been satisfied; |
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Parent and Purchaser have not received a certificate executed on behalf of Volcano by Volcanos Chief Executive Officer and Chief Financial Officer confirming that the conditions set forth in bullets two, three and
four above have been duly satisfied; |
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there has been issued by any court of competent jurisdiction or there remains in effect any temporary restraining order, preliminary or permanent
injunction or other order preventing the acquisition of or |
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payment for Shares pursuant to the Offer or any action has been taken, or any legal requirement or order has been promulgated, entered, enforced, enacted, issued or deemed applicable to the Offer
or the Merger by any governmental body which directly or indirectly prohibits, or makes illegal, the acquisition of or payment for Shares pursuant to the Offer, or the consummation of the Merger; |
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there is pending any legal proceeding by a governmental body having authority over Parent, Purchaser, Volcano or any of its subsidiaries (i) challenging or seeking to restrain or prohibit the consummation of the
Offer or the Merger, (ii) seeking to restrain or prohibit Parents or its affiliates ownership or operation of the business of Volcano or any of its subsidiaries, or of Parent or affiliates, or to compel Parent or any of its affiliates to
dispose of or hold separate all or any portion of the business or assets of Volcano or any of its subsidiaries or of Parent or its affiliates or (iii) seeking to impose or confirm material limitations on the ability of Parent or any of its
affiliates effectively to exercise full rights of ownership of the Shares; or |
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the Merger Agreement is terminated in accordance with its terms. |
The foregoing conditions
(the Offer Conditions) are for the sole benefit of Parent and Purchaser and (except for the Minimum Condition) may be waived by Parent and Purchaser, in whole or in part at any time and from time to time, in the sole discretion of Parent
and Purchaser. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right will be deemed an ongoing right which may be asserted at any time and from time
to time.
16. |
Adjustments to Prevent Dilution. |
In the event that, notwithstanding Volcanos
covenant to the contrary (See Section 11 The Merger Agreement; Other AgreementsThe Merger AgreementConduct of Business of Volcano), between the date of the Merger Agreement and the Effective Time, Volcano
changes the number of outstanding Shares by reason of any reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, or any stock dividend thereon with a record date during such period, the Offer Price and
the consideration payable in the Merger will be equitably adjusted to reflect such reclassification, recapitalization, stock split or combination, exchange or readjustment of shares, or stock dividend thereon.
17. |
Certain Legal Matters; Regulatory Approvals. |
General
Except as described in this Section 17, we are not aware of any pending legal proceeding relating to the Offer. Except as described in
this Section 17, based on our, Parents and Royal Philips review of publicly available filings by Volcano with the SEC and other information regarding Volcano, we are not aware of any governmental license or regulatory permit that
appears to be material to Volcanos business that might be adversely affected by our acquisition of Shares as contemplated in this Offer to Purchase or of any approval or other action by any governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by us as contemplated in this Offer to Purchase. However, any such approval or other action, if needed, may not be obtained or may not be obtained
without substantial conditions, and failure to obtain any such approvals or take any such other actions might result in adverse consequences to Volcanos business, or might result in a requirement to dispose of certain parts of Volcanos
business, any of which could cause us to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 Conditions to the Offer.
Litigation
On
December 22, 2014, Melvin Lax, an alleged stockholder of Volcano, filed a purported class action lawsuit against Volcano, its directors, Koninklijke Philips N.V., Philips Holding USA Inc. and Clearwater Merger Sub, Inc. in the Delaware Court of
Chancery, captioned Lax v. Volcano Corp., et al., Case No. 10485. The complaint alleges generally that the Volcano directors breached their fiduciary duties to Volcano
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stockholders, and that the other defendants aided and abetted such breaches, by seeking to sell Volcano for inadequate consideration and agreeing to allegedly preclusive deal protections. The
complaint seeks, among other things, (1) an injunction prohibiting defendants from proceeding with, consummating or closing the proposed transaction; (2) recission or rescissory damages in the event the proposed transaction is consummated;
and (3) attorneys fees and costs. We intend to vigorously defend against such claims.
State Takeover Statutes
Section 203 of the DGCL restricts an interested stockholder (including a person who owns or has the right to
acquire 15% or more of the corporations outstanding voting stock) from engaging in a business combination (defined to include mergers and certain other actions) with certain Delaware corporations for a period of three years
following the time such person became an interested stockholder. These restrictions will not be applicable to us or Parent because the Volcano Board has unanimously approved the Offer, the Merger, the Merger Agreement and the other transactions
contemplated thereby, including for purposes of Section 203.
A number of other states have adopted takeover laws and regulations
that purport, to varying degrees, to be applicable to attempts to acquire securities of corporations that are incorporated in such states or that have substantial assets, stockholders, principal executive offices or principal places of business
therein. To the extent that certain provisions of certain of these state takeover statutes purport to apply to the Offer or the Merger, we believe there are reasonable bases for contesting such laws. In Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute that, 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 could, as a matter of corporate law, constitutionally disqualify a potential acquiror from voting shares of a target corporation without the prior
approval of the remaining stockholders where, among other things, the corporation is incorporated in, and has a substantial number of stockholders in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District
Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods,
Inc. v. McReynolds, a Federal District Court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit.
We are not aware of any other state takeover laws or regulations that are applicable to the Offer or the
Merger and have not attempted to comply with any other state takeover laws or regulations. If any government official or third party should seek to apply any such state takeover law to the Offer or the Merger or any of the other transactions
contemplated by the Merger Agreement, we will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event it is asserted that one or
more state takeover statutes are applicable to the Offer or the Merger and an appropriate court does not determine that it is or they are inapplicable or invalid as applied to the Offer or the Merger, we might be required to file certain information
with, or to receive approvals from, the relevant state authorities or holders of Shares, and we might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or might be delayed in continuing or consummating the Offer or
the Merger. In such case, we may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 Conditions to the Offer.
U.S. Antitrust Compliance
Under the HSR Act and the related rules and regulations that have been promulgated thereunder by the FTC, certain acquisition transactions may
not be consummated unless certain information and documentary materials have been furnished to the Antitrust Division of the DOJ (the Antitrust Division) and the FTC and certain waiting period requirements have been satisfied. The
requirements of the HSR Act apply to the acquisition of Shares in the Offer and the Merger.
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Under the HSR Act and the rules and regulations promulgated thereunder by the FTC, the initial
waiting period for a cash tender offer is 15 days, but this period may be shortened if the reviewing agency grants early termination of the waiting period, or it may be lengthened if the acquiring person voluntarily withdraws and
re-files to allow a second 15-day waiting period, or if the reviewing agency issues a formal request for additional information and documentary material.
Pursuant to the Merger Agreement, we and Volcano expect to file our respective Premerger Notification and Report Forms with the FTC and the
Antitrust Division by December 31, 2014 for review in connection with the Offer.
The FTC and the Antitrust Division will consider
the legality under the U.S. federal antitrust laws of our proposed acquisition of Shares pursuant to the Offer. At any time before or after Purchasers acceptance for payment of Shares pursuant to the Offer, if the Antitrust Division or the FTC
believes that the Offer would violate the U.S. federal antitrust laws by substantially lessening competition in any line of commerce affecting U.S. consumers, the FTC and the Antitrust Division have the authority to challenge the transaction by
seeking a federal court order enjoining the transaction or, if Shares have already been acquired, requiring disposition of such Shares, or the divestiture of substantial assets of Philips, Volcano or any of their respective subsidiaries or
affiliates. U.S. state attorneys general and private persons may also bring legal action under the U.S. federal antitrust laws seeking similar relief or seeking conditions to the completion of the Offer. While we believe that the consummation of the
Offer will not violate any U.S. federal antitrust laws, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. If any such action is threatened or commenced
by the FTC, the Antitrust Division or any state or any other person, Purchaser may not be obligated to consummate the Offer or the Merger.
Foreign Antitrust Compliance
Both Volcano and Philips and their respective subsidiaries conduct business in many countries around the world. In connection with the
acquisition of the Shares pursuant to the Offer, the laws of certain of these foreign countries require the filing of information with, or the obtaining of the approval of, governmental authorities therein before completion of the offer. Set forth
below are those jurisdictions outside the United States where such filings will be made. Further, if any action is taken before completion of the offer by any government or governmental authority, we may not be obligated to accept for payment or pay
for any of the tendered Shares. See Section 15Conditions to the Offer for certain conditions to the offer that could become applicable in the event of such an action.
Austria. The acquisition of Shares pursuant to the Offer may only be completed under Austrian law if (i) the Austrian Federal
Competition Authority and the Austrian Federal Cartel Attorney (together, the Official Parties (Amtsparteien)) have formally waived their right to apply for an in-depth investigation (Prüfung) of the proposed acquisition pursuant to
Section 11(4) of the Austrian Cartel Act (Kartellgesetz (KartG)); (ii) the statutory waiting period pursuant to Sections 11(1) or 11(1a) KartG has expired without either of the Official Parties having requested an in-depth
investigation of the proposed acquisition; (iii) following an in-depth investigation pursuant to Section 12 KartG, the Austrian Cartel Court or the Austrian Cartel Supreme Court has issued a legally binding (rechtskräftige) decision
holding that the proposed acquisition (a) is not a notifiable concentration (Section 12(1)(1) KartG); or (b) is not prohibited and is compatible with the applicable merger control provisions (Section 12(1)(3) KartG); or (iv) the
Austrian Cartel Court has issued a legally binding (rechtskräftige) decision to terminate proceedings in relation to the proposed acquisition pursuant to Section 14(1) KartG. We and Volcano submitted notification of the proposed
acquisition with the Official Parties on December 22, 2014.
Germany. The acquisition of Shares pursuant to the Offer may
only be completed under German law if the German Federal Cartel Office has (i) notified Purchaser within one month from receiving a complete notification of the proposed acquisition that the conditions for a prohibition under Section 36(1)
of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen (GWB)) are not fulfilled or that the
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proposed acquisition does not require notification pursuant to Section 39 GWB; (ii) not informed Purchaser within one month from receiving a complete notification that it has opened
an in-depth investigation (Hauptprüfverfahren) of the proposed acquisition; or (iii) after having initiated an in-depth investigation pursuant to Section 40(1) and (2) GWB, issued a decision granting clearance of the proposed
acquisition pursuant to Section 40(2)/(3) GWB, or not prohibiting the proposed acquisition by decision (a) within four months of receiving a complete notification of the proposed acquisition or (b) if Purchaser has agreed to an
extension of the deadline pursuant to Section 40(2)(4) No. 1 GWB, by the date agreed upon by the Acquirer. We and Volcano submitted the notification of the proposed acquisition with the German Federal Cartel Office on December 29,
2014.
Japan. The acquisition of Shares pursuant to the Offer may only be completed under Japanese law if the waiting period
under the Japanese Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of April 14, 1947, as amended) with respect to the proposed acquisition has expired and notification has been received by Purchaser
from the Japan Fair Trade Commission (the JFTC) of its decision not to issue a cease and desist order pursuant to Article 9 of JFTC Regulation No. 1 of 1953 with respect to the proposed acquisition.
Taiwan. The acquisition of Shares pursuant to the Offer may only be completed under Taiwanese law if the Taiwan Fair Trade Commission
(TFTC) has made no objection to the proposed acquisition during the 30-day waiting period (or 60-day waiting period if so extended by the TFTC) after its receipt of a complete notification from Purchaser pursuant to Article 11 of the
Fair Trade Act of Taiwan. We and Volcano submitted the notification to the TFTC on December 29, 2014.
Israel. The
acquisition of Shares pursuant to the Offer may only be completed under Israeli law if the Israeli Antitrust Commissioner issuing a decision granting clearance of the proposed acquisition pursuant to the Restrictive Trade Practices Law 5748-1988 and the regulations made thereunder. We and Volcano submitted notification of the proposed acquisition with the Israeli Antitrust Commissioner on December 25, 2014.
Appraisal Rights
No appraisal rights are available to the holders of Shares in connection with the Offer. However, if the Merger is consummated, the holders of
Shares immediately prior to the Effective Time who (i) did not tender their Shares in the Offer; (ii) follow the procedures set forth in Section 262 of the DGCL and (iii) do not thereafter withdraw their demand for appraisal of
such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court of Chancery and receive payment of the fair value of such Shares,
exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, as determined by such court.
The fair value of any Shares could be based upon considerations other than, or in addition to, the price paid in the Offer and the
market value of such Shares. Holders of Shares should recognize that the value so determined could be higher or lower than, or the same as, the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer
Price). Moreover, we may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such Shares is less than such amount.
Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the
effective date of the merger, or the surviving corporation within ten days thereafter, will notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger
or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and will include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9
constitutes the formal notice of appraisal rights under Section 262 of the DGCL.
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As described more fully in the Schedule 14D-9, if a
stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such stockholder must do all of the following:
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prior to the consummation of the Offer, which is the first date on which Parent irrevocably accepts for purchase the Shares tendered pursuant to the Offer, deliver to Volcano a written demand for appraisal of Shares
held, which demand must reasonably inform Volcano of the identity of the stockholder and that the stockholder is demanding appraisal; |
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not tender their Shares in the Offer; and |
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continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Effective Time. |
The foregoing summary of the appraisal rights of stockholders under the DGCL does not purport to be a complete statement of the procedures
to be followed by stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence
to the applicable provisions of Delaware law. A copy of Section 262 of the DGCL is included as Annex II to the Schedule 14D-9.
The information provided above is for informational purposes only with respect to your alternatives if the Merger is consummated. If you
tender your Shares pursuant to the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares but, instead, subject to the conditions to the Offer, you will receive the Offer Price for your Shares.
Stockholder Approval Not Required
Section 251(h) of the DGCL provides that stockholder approval of a merger is not required if certain requirements are met, including,
among others, that (i) the acquiring company consummates a tender offer for any and all of the outstanding common stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be entitled to vote on the merger and
(ii) following the consummation of such tender offer, the acquiring company owns at least such percentage of the stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be required to adopt the merger. If the
Minimum Condition is satisfied and we accept Shares for payment pursuant to the Offer, we will hold a sufficient number of Shares to ensure that Volcano will not be required to submit the adoption of the Merger Agreement to a vote of the
stockholders of Volcano. Following the consummation of the Offer and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, we, Parent and Volcano will take all necessary and appropriate action to effect the
Merger as promptly as practicable without a meeting of stockholders of Volcano in accordance with Section 251(h) the DGCL.
We have retained the Depositary and the Information Agent in
connection with the Offer. Each of the Depositary and the Information Agent will receive customary compensation and, subject to certain limits, reimbursement for reasonable out-of-pocket expenses and customary indemnification against certain
liabilities in connection with the Offer.
As part of the services included in such retention, the Information Agent may contact holders
of Shares by personal interview, mail, electronic mail, telephone and other methods of electronic communication and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer materials to beneficial
holders of Shares.
Except as set forth above, neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or
other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust companies or other nominees will, upon request, be reimbursed by us for customary mailing and handling expenses incurred by them in
forwarding the Offer materials to their customers.
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The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, we may, in our discretion,
take such action as we deem necessary to make the Offer comply with the laws of any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction in compliance with applicable laws.
No person has been authorized to give any information or to make any representation on behalf of us not contained herein or in the Letter
of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized.
We and Parent have filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, a Solicitation/Recommendation Statement on Schedule 14D-9 is being filed with the SEC by
Volcano pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendation of the Volcano Board with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information, and Volcano
may file amendments thereto. The Schedule TO and the Schedule 14D-9, including their respective exhibits, and any amendments to any of the foregoing, may be examined and copies may be obtained from
the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or may be accessed electronically on the SECs website at www.sec.gov and are available from the Information Agent at the address and telephone number
set forth on the back cover of this Offer to Purchase.
CLEARWATER MERGER SUB, INC.
December 30, 2014
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ANNEX A
CERTAIN INFORMATION REGARDING THE DIRECTORS
AND EXECUTIVE OFFICERS OF ROYAL PHILIPS, PARENT AND PURCHASER
The following table sets forth the (i) name, (ii) current principal occupation, (iii) material occupations, positions, offices
or employment held within the past five years of each director and executive officer of Royal Philips, Parent and Purchaser, and (iv) name, address, and principal business of any corporation in which the occupation, position, office or
employment was carried on. The business address of each of the directors and executive officers of Royal Philips is Koninklijke Philips N.V., Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The business address of each of the directors and
executive officers of Parent and Purchaser is Philips Holding USA, 3000 Minuteman Road, Andover, Massachusetts 01810. The telephone number at such office is (978) 687-1501. Unless otherwise specified, each person listed below is a citizen of
the United States.
During the past five years, to our knowledge or the knowledge of Royal Philips, Parent and Purchaser, respectively,
after reasonable inquiry, none of the persons listed below has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to any judicial or administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining him, her or it from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any
violation of U.S. federal or state securities laws.
Royal Philips
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Name (Citizenship) |
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Present Principal Occupation / Material Positions Held
During the Past Five Years |
Frans van Houten (Dutch) |
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President and Chief Executive Officer of Royal Philips, Chairman of the Board of Management and Executive Committee of Royal Philips
(April 2011Present) Chief Operating Officer of Royal Philips (January
2011March 2011) Consultant to Separation of ING Group N.V. (2009August
2010) (Amsterdamse Poort, Biljmerplein 888, 1102 MG Amsterdam, The Netherlands) |
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Pieter Nota (Dutch) |
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Member of the Board of Management (April 2011Present) and Executive Committee (July 2011Present) of Royal Philips
Executive Vice President of Royal Philips, Chief Executive Officer of Philips Consumer
Lifestyle (September 2010Present) Chief Marketing & Innovation Officer of
Beiersdorf AG (2005June 2010) (Unnastrasse 48, 20245 Hamburg, Germany) |
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Ron Wirahadiraksa (Dutch) |
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Executive Vice President of Royal Philips, Chief Financial Officer of Royal Philips, Member of the Board of Management and the Executive
Committee of Royal Philips (March 2011Present) Executive Vice President and
Chief Financial Officer of Philips Healthcare (2008February 2011) |
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Jeroen van der Veer (Dutch) |
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Member (July 2009Present) and Chairman (March 2011Present) of the Supervisory Board of Royal Philips
Chairman of the Supervisory Board of ING Group N.V.
(July 2009Present) |
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Name (Citizenship) |
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Present Principal Occupation / Material Positions Held
During the Past Five Years |
C.J.A. Van Lede (Dutch) |
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Member of the Supervisory Board of Royal Philips (April 2003Present)
Member of the Board of Directors of Air Liquide Group (May 2003Present) (75 Quai
dOrsay 75321 Paris cedex 07, France) Member of the Supervisory Board of Heineken
N.V. (April 2004April 2013) (Tweede Weteringplantsoen 21, 1017 ZD Amsterdam, The Netherlands)
Member of the Board of Directors of Air France/KLM Group (June 2002Present) (45 rue de Paris, 95747 Roissy CDG Cedex, France)
Senior Advisor of JP Morgan Plc (2005Present)(10 Aldermanbury, London, EC2V 7RF,
United Kingdom) Chairman of the Supervisory Board of Royal Imtech N.V.
(August 2013Present) (Kampenringweg 45a, 2803 PE Gouda, The Netherlands) |
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Ewald Kist (Dutch) |
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Member of the Supervisory Board of Royal Philips (July 2004Present)
Deputy Chairman of the Supervisory Board of Koninklijke DSM N.V. (July 2004Present)
(Het Overloon 1, 6411 TE Heerlen, the Netherlands) Member of the Board of Directors of
Moodys Corporation (July 2004Present) (7 World Trade Center at 250 Greenwich Street, New York, New York 10007)
Member of the Supervisory Board of Dutch Central Bank (September 2004September 2012) (Westeinde 1, 1017 ZN, Amsterdam, The
Netherlands) |
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Heino von Prondzynski (German) |
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Member of the Supervisory Board of Royal Philips (March 2007Present)
Member of the Board of Directors of Hospira, Inc. (March 2009Present) (275 North
Field Drive, Lake Forest, IL, USA) Chairman of the Supervisory Board of HTL Strefa
(December 2009present) (Wybrzeże Gdyńskie 6A, 01-531 Warsaw, Poland)
Member of the Supervisory Board of Qiagen N.V. (June 2007June 2013) (Spoorstraat 50, 5911 KJ Venlo, The Netherlands)
Chairman of the Supervisory Board of Epigenomics AG (May 2012Present) (Genestrasse
5, 10829, Berlin, Germany) Director of Quotient Limited (September 2014Present)
(Bush Loan, Penicuik, EH26 OPZ, United Kingdom) Chairman of the Board of Directors of
Nobel Biocare Holding AG (March 2010-May 2011) (8302 Kloten, Switzerland) |
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Name (Citizenship) |
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Present Principal Occupation / Material Positions Held
During the Past Five Years |
Christine A. Poon |
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Member of the Supervisory Board of Royal Philips (March 2009Present)
Professor of Management, Fisher College of Business, Ohio State University
(May 2009Present) (201 Fisher Hall, 2100 Neil Avenue, Columbus, Ohio 43210)
Member of the Board of Directors of Prudential Financial Inc. (September 2006Present) (751 Broad Street, Newark, New Jersey 07102)
Member of the Board of Directors of Regeneron Pharmaceuticals Inc.
(November 2010Present) (777 Old Saw Mill Road, Tarrytown, NY 10591) Member
of the Board of Directors of The Sherwin-Williams Company (February 2014Present) (101 W. Prospect Avenue, Cleveland, Ohio 44115)
Dean of the Fisher College of Business, Ohio State University (May 2009November 2014) (201 Fisher Hall, 2100 Neil Avenue, Columbus, Ohio
43210) |
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Jackson P. Tai |
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Member of the Supervisory Board of Royal Philips (March 2011Present)
Member of the Supervisory Board of the Bank of China Limited (March 2011Present) (1
Fuxingmen Nei Dajie, Beijing, 100818, China) Member of the Board of Directors of
Mastercard Incorporated (September 2008Present) (2000 Purchase Street, Purchase, New York 10577)
Member of the Board of Directors of Eli Lilly and Company (November 2013Present) (Lilly Corporate Center, Indianapolis, Indiana 46285)
Non-Executive Director of Russell Reynolds & Associates (June 2013Present)
(200 Park Avenue, Suite 2300, New York, New York 10166) Member of the Supervisory
Board of Singapore Airlines (November 2011July 2014) (Airline House, 25 Airline Road, Singapore, 819829) |
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Neelam Dhawan (Indian) |
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Member of the Supervisory Board of Royal Philips (April 2012Present)
Managing Director of Hewlett-Packard India Pvt Ltd. (July 2008Present) (Sixth Floor,
Tower D, Global Business Park, M G Road, Gurgaon 122 002, India) |
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Orit Gadiesh (Israel, USA) |
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Member of the Supervisory Board of Royal Philips (May 2014Present)
Chairman of Bain & Company (1993Present) (131 Dartmouth Street, Boston,
Massachusetts 02116) |
Parent
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Name (Citizenship) |
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Present Principal Occupation / Material Positions Held
During the Past Five Years |
David A. Dripchak* |
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Head of Finance, Region North America of Philips Electronics North America Corporation (February 2011Present)
Vice President and Controller, Philips Lighting North America (2004January 2011)
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Joseph E. Innamorati |
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Senior Director, Legal Department of Philips Electronics North America Corporation (January 2010Present)
Senior Vice President and Chief Legal Officer, Philips North America Corporation (October
2005December 2009) |
Brent Shafer |
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Chief Executive Officer of Philips North America and Philips Electronics North America Corporation (February 2014Present)
Chief Executive Officer of Home Healthcare Solutions, Philips Healthcare (May
2010February 2014) Chief Executive Officer of Philips North America and Philips
Electronics North America Corporation (April 2009May 2010) |
Paul Cavanaugh |
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Regional Tax Manager, Region North America, of Philips Electronics North America Corporation (December 2008Present)
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Irma I. Gomez |
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Paralegal, Philips Electronics North America Corporation (March 2010Present)
Project Management Manager, AVP, Senior Legal Analyst, of Wells Fargo Funds Management
Company (November 2000February 2010) (200 Berkeley Street, Boston, Massachusetts 02110) |
James Mark Mattern II* |
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Head of Finance, Region North America, of Philips Electronics North America Corporation (November 2014Present)
Global Chief Financial Officer and Member of the Executive Board of TP Vision (April
2012August 2014) (Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands)
Senior Vice President and Chief Financial Officer, Global Business Group: Television of Philips (November 2010March 2012)
Vice President and Chief Financial Officer, Business Group Personal Care of Philips (July
2009October 2010) |
* |
On January 1, 2015, Mr. Dripchak will cease to be an officer and director of Parent, and will be replaced by Mr. Mattern. |
Purchaser
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Name (Citizenship)/ Title |
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Present Principal Occupation / Material Positions Held
During the Past Five Years |
David A. Dripchak |
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See above. |
Joseph E. Innamorati |
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See above. |
Paul Cavanaugh |
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See above. |
Irma I. Gomez (USA) |
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See above. |
ANY LETTER OF TRANSMITTAL TO BE DELIVERED TO THE DEPOSITARY MAY ONLY BE
SENT TO THE DEPOSITARY BY MAIL OR COURIER TO ONE OF THE ADDRESSES SET FORTH
BELOW AND MAY NOT BE SENT BY FACSIMILE TRANSMISSION. ANY CERTIFICATES
REPRESENTING SHARES AND ANY OTHER REQUIRED DOCUMENTS SENT BY A
STOCKHOLDER OF VOLCANO OR SUCH STOCKHOLDERS BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE SHOULD BE SENT TO THE
DEPOSITARY AS FOLLOWS:
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If delivering by mail:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department P.O. Box 2042 New York, New York
10272-2042 |
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If delivering by courier:
American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
Other Information:
Questions and requests for assistance may be directed to the Information Agent, at the address and telephone number set forth below. In
addition, requests for additional copies of the Offer to Purchase, the Letter of Transmittal, the notice of guaranteed delivery and other tender offer materials may be directed to the Information Agent. Stockholders may also contact their broker,
dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
480 Washington Boulevard, 26th Floor
Jersey City, NJ 07310
Stockholders, Banks and Brokers
Call Toll Free: (866) 856-2826
Exhibit (a)(1)(ii)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
Pursuant to the Offer to Purchase dated December 30, 2014
by
CLEARWATER MERGER
SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON JANUARY 29, 2015 (ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015) UNLESS THE
OFFER IS EXTENDED.
The Depositary for the Tender Offer is:
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By Registered or Certified Mail: |
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By Express or Overnight Courier: |
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American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, New York 10272-2042 |
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American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, New York 11219 |
Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a
valid delivery to the Depositary (as defined below). You must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and complete the IRS Form W-9 included in this Letter of
Transmittal or an applicable IRS Form W-8, if required. The instructions set forth in this Letter of Transmittal should be read carefully before you tender any of your Shares (as defined below) pursuant to the Offer (as defined below).
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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 Certificate(s)) |
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Shares Tendered (Attach
additional signed list, if necessary) |
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Share Certificate
Number(s)(1) |
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Total Number of
Shares Represented
by
Share Certificate(s)(1) |
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Total Number
of Shares
Represented by Book
entry (Electronic Form)
Tendered |
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Total
Number of Shares
Tendered(2) |
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Total Shares |
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(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless a lower number of Shares to be tendered is otherwise indicated, it will be assumed
that all Shares described above are being tendered. See Instruction 4. |
The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, Purchaser (as defined below) may, in its
discretion, take such action as it deems necessary to make the Offer comply with the laws of any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction in compliance with applicable laws.
This Letter of Transmittal is to be used by stockholders of Volcano Corporation, a Delaware corporation (Volcano), if certificates
for Shares (Share Certificates) are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company (DTC), unless an
Agents Message (as defined in Instruction 2) is utilized in lieu of this Letter of Transmittal, and in each case in accordance with the procedures set forth in Section 3 of the Offer to Purchase.
Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for book-entry transfer on a
timely basis, or who cannot deliver all other required documents to the Depositary prior to 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015) (the Expiration
Date, unless Purchaser extends the Offer pursuant to and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean the latest time and date at which the Offer, as so extended, will expire)),
must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase in order to participate in the Offer. See Instruction 2. Delivery of documents to DTC does not constitute
delivery to the Depositary.
IF ANY OF THE SHARE CERTIFICATES THAT YOU OWN HAVE BEEN LOST OR DESTROYED,
SEE INSTRUCTION 11 OF THIS LETTER OF TRANSMITTAL
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CHECK HERE IF YOU HAVE LOST YOUR SHARE CERTIFICATE(S) AND REQUIRE ASSISTANCE IN OBTAINING REPLACEMENT CERTIFICATE(S). BY CHECKING THIS BOX, YOU UNDERSTAND THAT YOU MUST CONTACT AMERICAN STOCK TRANSFER AND TRUST COMPANY,
LLC TO OBTAIN INSTRUCTIONS FOR REPLACING LOST CERTIFICATES. SEE INSTRUCTION 11. |
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CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (NOTE THAT ONLY FINANCIAL INSTITUTIONS THAT ARE
PARTICIPANTS IN THE SYSTEM OF DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): |
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Name of Tendering Institution: |
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CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: |
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Name(s) of Tendering Stockholder(s): |
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Window Ticket Number (if any): |
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Date of Execution of Notice of Guaranteed Delivery: |
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Name of Eligible Institution that Guaranteed Delivery: |
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NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby
tenders to Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation (Parent) and a wholly owned subsidiary of Koninklijke Philips N.V.,
a corporation organized under the laws of The Netherlands (Royal Philips), the above described shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock (such rights, together with such
shares of common stock, the Shares), of Volcano Corporation, a Delaware corporation (Volcano), pursuant to Purchasers offer to purchase all outstanding Shares, at a purchase price of $18.00 per Share, net to the seller
in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 30, 2014 (as it may be amended or supplemented from time to time, the Offer
to Purchase), receipt of which is hereby acknowledged, and in this Letter of Transmittal (as it may be amended or supplemented from time to time, this Letter of Transmittal and, together with the Offer to Purchase, the
Offer). The undersigned understands that Purchaser reserves the right to transfer or assign in whole or in part from time to time 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 undersigneds right to receive payment for the Shares validly tendered and not withdrawn pursuant
to the Offer.
Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms and
conditions of the Offer as so extended or amended) and subject to, and effective upon, acceptance for payment of Shares validly tendered herewith and not properly withdrawn prior to the Expiration Date 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 Shares that are being tendered hereby (and all dividends, distributions, rights, other Shares or other securities issued or
issuable in respect thereof on or after the date hereof (Distributions)) and irrevocably constitutes and appoints American Stock Transfer & Trust Company, LLC (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 in the Shares tendered by this Letter
of Transmittal), to (i) deliver Share Certificates representing such Shares (and all Distributions) or transfer ownership of such Shares (and all Distributions) on the account books maintained by DTC, together, in any such 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 Volcano 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 and subject to the conditions of the Offer.
By executing this Letter of Transmittal (or, in the case of a book-entry transfer, by delivery of an Agents Message in lieu of this
Letter of Transmittal), the undersigned hereby irrevocably appoints Joseph A. Innamorati and Irma I. Gomez and any other person designated in writing by Purchaser as the true and lawful agent, attorney, attorney-in-fact and proxy of the undersigned,
each with full power of substitution, (i) to vote at any annual or special meeting of Volcanos stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or its, his or her
substitute shall in its, his or her sole discretion deem proper with respect to and (ii) to otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect
to, all Shares (and all Distributions) tendered hereby and accepted for payment by Purchaser. This appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Offer. This power of
attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for payment shall, without further action,
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revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and all Distributions), and no subsequent powers of attorney, proxies, consents
or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchasers
acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares (and all Distributions), including voting at any meeting of Volcanos stockholders.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any
and all Shares tendered hereby (and all Distributions) and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good, valid and unencumbered title to such Shares (and all Distributions), free and clear of all liens,
restrictions, charges and encumbrances, and the same will not be subject to any adverse claims. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Share Certificate(s) have been endorsed
to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of any and all Shares tendered hereby (and all Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for
the account of Purchaser all Distributions in respect of any and all 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 deduct from the purchase price of Shares tendered hereby the amount or value of such Distribution as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the
undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to
Purchase, this tender is irrevocable.
The undersigned hereby acknowledges that delivery of any Share Certificate shall be effected, and
risk of loss and title to such Share Certificate shall pass, only upon the proper delivery of such Share Certificate to the Depositary.
The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the
Instructions hereto will constitute the undersigneds acceptance of the terms and conditions of the Offer. Purchasers 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 (and if the Offer is extended or amended, the terms of or the conditions of any such extension or amendment). The undersigned recognizes that under certain circumstances set forth in the Offer,
Purchaser may not be required to accept for exchange any Shares tendered hereby.
Unless otherwise indicated under Special Payment
Instructions, please issue the check for the purchase price of all of Shares purchased and, if appropriate, return any Share Certificates not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under
Description of Shares Tendered. Similarly, unless otherwise indicated under Special Delivery Instructions, please mail the check for the purchase price of all Shares purchased and, if appropriate, return any Share
Certificates not tendered or not accepted for payment (and any 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, if appropriate, return any Share Certificates not tendered
or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such Share Certificates (and any accompanying documents, as appropriate)
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to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled Special Payment Instructions, please credit any Shares tendered herewith by book-entry transfer
that are not accepted for payment by crediting the account at DTC. 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
thereof if Purchaser does not accept for payment any of such Shares so tendered.
LOST SHARE CERTIFICATES: PLEASE CALL AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC AT (877) 248-6417 TO OBTAIN NECESSARY DOCUMENTS TO REPLACE YOUR LOST SHARE CERTIFICATES.
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SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) |
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SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) |
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To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or Share Certificates not tendered or not accepted for payment are to be issued in the name of someone other than the
undersigned. |
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To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or Share Certificates not tendered or not accepted are to be mailed to someone other than the undersigned or to the undersigned
at an address other than that shown above. |
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Issue ¨ Check and/or |
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Mail ¨ Check and/or |
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¨ Share Certificates to: |
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¨ Share Certificates to: |
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Name |
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Name |
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(Please print) |
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(Please print) |
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Address |
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Address |
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(Including Zip Code) |
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(Including Zip Code) |
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(Taxpayer Identification
or Social Security No.) (Also Complete IRS Form W-9 Included Herein) |
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(Taxpayer Identification
or Social Security No.) (Also Complete IRS Form W-9 Included Herein) |
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IMPORTANT
STOCKHOLDER: SIGN HERE
(PLEASE COMPLETE AND RETURN THE IRS FORM W-9 INCLUDED IN THIS LETTER OF
TRANSMITTAL OR AN APPLICABLE IRS FORM W-8)
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Signature(s) of Holder(s) of Shares |
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Capacity (full title) (See Instruction 5) |
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Area Code and Telephone No. |
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Tax Identification or Social Security No. (See IRS Form W-9 included herein) |
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Must be
signed by registered holder(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by Share Certificates and documents transmitted herewith. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.
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GUARANTEE OF SIGNATURE(S)
(IF REQUIRED SEE INSTRUCTIONS 1 AND 5)
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this Letter of
Transmittal (i) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Instruction 1, includes any participant in DTCs systems whose name(s) appear(s) on a security position listing as
the owner(s) of Shares) of Shares tendered herewith, unless such registered holder(s) has completed either the box entitled Special Payment Instructions or the box entitled Special Delivery Instructions on this Letter of
Transmittal or (ii) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of or participant in a recognized Medallion
Program approved by the Securities Transfer Association Inc., including the Security Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange Medallion Signature Program, or any other
eligible guarantor institution, as such term is defined in Rule 17Ad-15 under the U.S. Securities Exchange Act of 1934, as amended (each, an Eligible Institution). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Requirements of Tender. No alternative, conditional or contingent tenders will be
accepted. In order for Shares to be validly tendered pursuant to the Offer, one of the following procedures must be followed:
For Shares
held as physical certificates, the Share Certificates representing tendered Shares, a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, 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 front page of this Letter of Transmittal before the Expiration Date.
For Shares held in book-entry form, either a properly completed and duly executed Letter of Transmittal, together with any required signature
guarantees, or an Agents Message in lieu of this Letter of Transmittal, and any other required documents, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal, and such Shares
must be delivered according to the book-entry transfer procedures (as set forth in Section 3 of the Offer to Purchase) and a timely confirmation of a book-entry transfer of Shares into the Depositarys account at DTC (a Book-Entry
Confirmation) must be received by the Depositary, in each case before the Expiration Date.
Stockholders whose Share Certificates
are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis or who cannot deliver all other required documents to the Depositary prior to the Expiration Date, may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth 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 (a 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) Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with this Letter of Transmittal, properly completed and duly executed, together
with any required signature guarantees, or, in the case of book-entry transfers of Shares, either this Letter of Transmittal or an Agents Message in lieu of this Letter of Transmittal, and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three NASDAQ Global Select Stock Market trading days after the date of execution of such Notice of Guaranteed Delivery. A Notice of Guaranteed Delivery may be delivered by overnight courier or
mailed 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 the case of Shares held through DTC, the Notice of Guaranteed
Delivery must be delivered to the Depositary by a participant by means of the confirmation system of DTC.
The term Agents
Message means a message transmitted by DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation that states that DTC has received an express acknowledgment from
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the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of this Letter of
Transmittal and that Purchaser may enforce such agreement against the participant.
The method of delivery of Shares, this Letter of
Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering stockholder. Shares will be deemed delivered (and the risk of loss of Share Certificates will pass) only when actually
received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
No fractional Shares will be purchased. By executing this Letter of Transmittal, the
tendering stockholder waives any right to receive any notice of the acceptance for payment of Shares.
3. Inadequate Space. If the space provided herein is inadequate, Share Certificate
numbers, the number of Shares represented by such Share Certificates and/or the number of Shares tendered should be listed on a signed separate schedule attached hereto.
4. Partial Tenders (Not Applicable to Stockholders who Tender by Book-Entry
Transfer). If fewer than all Shares represented by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box entitled Total Number of
Shares Tendered. In such case, a new certificate for the remainder of Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
(a) Exact Signatures. If this Letter of Transmittal is signed by the registered
holder(s) of Shares tendered hereby, then the signature(s) must correspond with the name(s) as written on the face of such Share Certificates for such Shares without alteration, enlargement or any change whatsoever.
(b) Holders. If any Shares tendered hereby are held of record by two or more
persons, then all such persons must sign this Letter of Transmittal.
(c) Different Names on Share
Certificates. If any Shares tendered hereby are registered in different names on different Share Certificates, then it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are
different registrations of Share Certificates.
(d) Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, then no endorsements of Share Certificates for such Shares or separate stock powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered holder(s) of Shares tendered hereby, then Share Certificates for
such Shares 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 Certificates for such Shares. Signature(s) on any such Share Certificates or
stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
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 legal entity or other person acting in a
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fiduciary or representative capacity, then such person should so indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act must be
submitted. Proper evidence of authority includes a power of attorney, a letter testamentary or a letter of appointment.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Purchaser or any successor entity thereto will pay all stock transfer taxes with respect to the transfer and sale of any Shares to it or its order pursuant to the Offer (for the avoidance of doubt, transfer taxes do not include U.S. federal, state,
local or foreign income tax or backup withholding taxes). If, however, payment of the purchase price is to be made to, or if Share Certificate(s) for Shares not tendered or not accepted for payment are to be registered in the name of, any person(s)
other than the registered holder(s), or if tendered Shares Certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, then the amount of any stock transfer taxes or other taxes
required by reason of the payment to a person other than the registered holder(s) of such Share Certificate (in each case whether imposed on the registered holder(s) or such other person(s)) payable on account of the transfer to such other person(s)
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 Share Certificate(s)
evidencing the Shares tendered hereby.
7. Special Payment and Delivery
Instructions. If a check is to be issued for the purchase price of any Shares tendered by this Letter of Transmittal in the name of, and, if appropriate, Share Certificates for Shares not tendered or not accepted for
payment are to be issued to, any person(s) other than the signer of this Letter of Transmittal or if a check and, if appropriate, such Share Certificates are to be returned to any person(s) other than the person(s) signing this Letter of Transmittal
or to an address other than that shown in this Letter of Transmittal, then the appropriate boxes on this Letter of Transmittal must be completed.
8. IRS Form W-9. To avoid backup withholding, a tendering stockholder that is
a United States person (as defined for United States federal income tax purposes) is required to provide the Depositary with a correct Taxpayer Identification Number (TIN) on IRS Form W-9, which is included herein following
Important Tax Information below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax, and that such stockholder is a United States
person (as defined for United States federal income tax purposes). See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for more instructions.
Certain stockholders (including, among others, corporations) may not be subject to backup withholding. Foreign stockholders that are not
United States persons (as defined for United States federal income tax purposes) should submit an appropriate and properly completed applicable IRS Form W-8, a copy of which may be obtained from the Depositary, in order to avoid backup
withholding. Such stockholders should consult a tax advisor to determine which Form W-8 is appropriate.
9. Irregularities. 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. 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 and Parent also reserve the absolute right to waive any of the conditions of the Offer (other than the Minimum Condition (as defined in the Offer to
Purchase), which may only be waived with the consent of Volcano) and Purchaser reserves the absolute right to waive 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 to the satisfaction of the Purchaser. Unless waived, any defects
or irregularities in connection with tenders must be cured within such time as Purchaser shall determine. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or
irregularities
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in tenders or incur any liability for failure to give any such notification. Purchasers interpretation of the terms and conditions of the Offer (including this Letter of Transmittal and
the instructions hereto) will be determined by Purchaser in its sole discretion.
10. Questions
and Requests for Additional Copies. The Information Agent may be contacted at the address and telephone number set forth on the last page of this Letter of Transmittal for questions and/or requests for additional copies of
the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be
furnished promptly at Purchasers expense.
11. Lost, Destroyed or Stolen
Certificates. If any Share Certificate representing Shares has been lost, destroyed or stolen, then the stockholder should promptly notify American Stock Transfer & Trust Company, LLC, as transfer agent
(the Transfer Agent), at (877) 248-6417, regarding the requirements for replacement. The stockholder will then be instructed as to the steps that must be taken in order to replace such Share Certificate(s). You may be required to
post a bond to secure against the risk that the Share Certificate(s) may be subsequently recirculated. You are urged to contact the Transfer Agent immediately in order to receive further instructions and for a determination of whether you will
need to post a bond and to permit timely processing of this documentation. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Share Certificates have been followed.
Share Certificates evidencing tendered Shares, or a Book-Entry Confirmation into the Depositarys account at DTC, as well as
this Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agents Message (if utilized in lieu of this Letter of Transmittal in connection with a book-entry transfer), and any other
documents required by this Letter of Transmittal, must be received before the Expiration Date, or the tendering stockholder must comply with the procedures for guaranteed delivery.
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IMPORTANT TAX INFORMATION
Under United States federal income tax law, a stockholder who is a United States person (as defined for United States federal income tax
purposes) surrendering Shares must, unless an exemption applies, provide the Depositary (as payer) with the stockholders correct TIN on IRS Form W-9, a copy of which is included in this Letter of Transmittal. If the stockholder is an
individual, then the stockholders TIN is generally such stockholders Social Security number. If the correct TIN is not provided, then the stockholder may be subject to a penalty imposed by the IRS and payments of cash to the stockholder
(or other payee) pursuant to the Offer may be subject to backup withholding of a portion of all payments of the purchase price.
Certain
stockholders (including, among others, corporations) may not be subject to backup withholding and reporting requirements. In order for an exempt foreign stockholder to avoid backup withholding, such person should complete, sign and submit an
appropriate IRS Form W-8 signed under penalties of perjury, attesting to his, her or its exempt status. An IRS Form W-8 can be obtained from the Depositary. Such stockholders should consult a tax advisor to determine which IRS
Form W-8 is appropriate. Exempt stockholders, other than foreign stockholders, should furnish their TIN, complete the Exempt payee box on the IRS Form W-9 and sign, date and return the IRS Form W-9 to the Depositary in
order to avoid erroneous backup withholding. See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional instructions.
If backup withholding applies, the Depositary is required to withhold and pay over to the IRS a portion of any payment made to a stockholder.
Backup withholding is not an additional tax. Rather, the United States federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a
refund may be obtained from the IRS if required information is timely furnished to the IRS. See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for additional instructions.
NOTE: FAILURE TO COMPLETE AND RETURN THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL (OR AN APPROPRIATE IRS FORM W-8) MAY RESULT IN
BACKUP WITHHOLDING AT THE APPLICABLE WITHHOLDING RATE OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE INSTRUCTIONS ENCLOSED WITH THE IRS FORM W-9 INCLUDED IN THIS LETTER OF TRANSMITTAL FOR ADDITIONAL
DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE APPLIED FOR IN THE SPACE FOR THE TIN ON THE IRS FORM W-9.
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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate IRS Center or Social Security Administration Office, or (2) I intend
to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, a portion of all reportable payments made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. |
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Form W-9
(Rev. August 2013) Department of the Treasury
Internal Revenue Service |
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Request for Taxpayer
Identification Number and Certification |
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Give Form to the
requester. Do not
send to the IRS. |
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Print or type
See Specific Instructions
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Name (as shown on your income tax return)
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Business name/disregarded entity name, if different from above
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Check appropriate box for federal tax classification: |
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Exemptions (see instructions): |
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C Corporation |
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S Corporation |
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Partnership |
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Trust/estate |
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Exempt payee code (it
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¨ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=partnership)
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¨ Other (see instructions) u |
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Exemption from
FATCA reporting code (if any)
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Address (number, street, and apt. or suite no.) |
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Requesters name and address (optional) |
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City, state, and ZIP code
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Part I |
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Taxpayer Identification Number (TIN) |
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Enter your TIN in the appropriate box. The TIN provided must match the name given on the Name line to avoid backup
withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number
(EIN). If you do not have a number, see How to get a TIN on page 3. Note.
If the account is in more than one name, see the chart on page 4 for guidelines on whose number to enter. |
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Social security
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Employer
identification number |
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Under penalties of perjury, I certify that:
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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 |
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I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and |
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I am a U.S. citizen or other U.S. person (defined below), and |
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The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding
because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to
an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions on page 3.
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Sign Here |
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Signature of U.S.
person u |
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Date u |
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. The IRS has created a page on IRS.gov for information about Form W-9, at www.irs.gov/w9. Information about any future
developments affecting Form W-9 (such as legislation enacted after we release it) will be posted on that page.
Purpose of Form
A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example,
income paid to you, payments made to you in settlement of payment card and third party network transactions, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions
you made to an IRA.
Use Form W-9 only if you are a U.S. person (including a resident alien),
to provide your correct TIN to the person requesting it (the requester) and, when applicable, to:
1. Certify that the TIN you are
giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person,
your allocable share of any partnership income from a U.S. trade or
business is not subject to the withholding tax on foreign partners share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct.
Note. If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requesters form if it
is substantially similar to this Form W-9.
Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:
An individual who is a U.S. citizen or U.S. resident alien,
A partnership, corporation, company, or association created or organized in the United States or under
the laws of the United States,
An estate (other than a foreign estate), or
A domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax
under section 1446 on any foreign partners share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a
partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your
U.S. status and avoid section 1446 withholding on your share of partnership income.
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Cat. No. 10231X |
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Form W-9 (Rev.
8-2013) |
Form W-9 (Rev. 8-2013) |
Page 2 |
In the cases below, the following person must give Form W-9 to the partnership for purposes of
establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States:
In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not
the entity,
In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the
U.S. grantor or other U.S. owner of the grantor trust and not the trust, and
In the case of a U.S.
trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.
Foreign person. If you are a
foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign
Entities).
Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to
reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a saving clause. Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of
income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on
an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items:
1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese
student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the
U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of
the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.
What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS a percentage
of such payments. This is called backup withholding. Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay,
payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper
certifications, and report all your taxable interest and dividends on your tax return.
Payments you receive will be subject to backup Withholding it:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the Part II instructions on page 3 for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return
(for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding
under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup
withholding. See Exempt payee code on page 3 and the separate Instructions for the Requester of Form W-9 for more information.
Also
see Special rules for partnerships on page 1.
What is FATCA reporting? The Foreign Account Tax Compliance Act (FATCA) requires a
participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code on page 3 and the
Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving
reportable payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form
W-9 if the name or TIN changes for the account, for example, if the grantor of a grantor trust dies.
Penalties
Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
Civil penalty for false information with respect to withholding. If you make a false
statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal penalty for falsifying
information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse
of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Name
If you are an individual, you must generally enter the name shown on your income tax return. However, if you have changed your last name, for instance, due to
marriage without informing the Social Security Administration of the name change, enter your first name, the last name shown on your social security card, and your new last name.
If the account is in joint names, list first, and then circle, the name of the person or entity whose number you entered in Part I of the form.
Sole proprietor. Enter your individual name as shown on your income tax return on the Name line. You may enter your business, trade, or
doing business as (DBA) name on the Business name/disregarded entity name line.
Partnership, C Corporation, or S
Corporation. Enter the entitys name on the Name line and any business, trade, or doing business as (DBA) name on the Business name/disregarded entity name line.
Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a disregarded
entity. See Regulation section 301.7701-2(c)(2)(iii). Enter the owners name on the Name line. The name of the entity entered on the Name line should never be a disregarded entity. The name on the Name
line must be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S.
owners name is required to be provided on the Name line. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entitys
name on the Business name/disregarded entity name line. If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a
U.S. TIN.
Note. Check the appropriate box for the U.S. federal tax classification of the person whose name is entered on the Name line
(Individual/sole proprietor, Partnership, C Corporation, S Corporation, Trust/estate).
Limited Liability Company (LLC). If the person identified on
the Name line is an LLC, check the Limited liability company box only and enter the appropriate code for the U.S. federal tax classification in the space provided. If you are an LLC that is treated as a partnership for U.S.
federal tax purposes, enter P for partnership. If you are an LLC that has filed a Form 8832 or a Form 2553 to be taxed as a corporation, enter C for C corporation or S for S corporation, as appropriate. If you are
an LLC that is disregarded as an entity separate from its owner under Regulation section 301.7701-3 (except for employment and excise tax), do not check the LLC box unless the owner of the LLC (required to be identified on the Name line)
is another LLC that is not disregarded for U.S. federal tax purposes. If the LLC is disregarded as an entity separate from its owner, enter the appropriate tax classification of the owner identified on the Name line.
Other entities. Enter your business name as shown on required U.S. federal tax documents on the Name line. This name should match the name
shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on the Business name/disregarded entity name line.
Exemptions
If you are exempt from backup withholding
and/or FATCA reporting, enter in the Exemptions box, any code(s) that may apply to you. See Exempt payee code and Exemption from FATCA reporting code on page 3.
Form W-9 (Rev. 8-2013) |
Page 3 |
Exempt payee code. Generally, individuals (including sole proprietors) are not exempt from backup
withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends. Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network
transactions.
Note. If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding.
The following codes identify payees that are exempt from backup withholding:
1An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies
the requirements of section 401(f)(2)
2The United States or any of its agencies or instrumentalities
3A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities
4A foreign government or any of its political subdivisions, agencies, or instrumentalities
5A corporation
6A
dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States
7A futures commission merchant registered with the Commodity Futures Trading Commission
8A real estate investment trust
9An entity registered at all times during the tax year under the Investment Company Act of 1940
10A common trust fund operated by a bank under section 584(a)
11A financial institution
12A middleman known in the investment community as a nominee or custodian
13A trust exempt from tax under section 664 or described in section 4947
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1
through 13.
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IF the payment is for . . . |
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THEN the payment is exempt for . . . |
Interest and dividend payments |
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All exempt payees except for 7 |
Broker transactions |
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Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities
acquired prior to 2012. |
Barter exchange transactions and patronage dividends |
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Exempt payees 1 through 4 |
Payments over $600 required to be reported and direct sales over $5,0001 |
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Generally, exempt payees 1 through 52 |
Payments made in settlement of payment card or third party network transactions |
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Exempt payees 1 through 4 |
1 |
See Form 1099-MISC, Miscellaneous Income, and its instructions. |
2 |
However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys fees, gross proceeds paid to an attorney,
and payments for services paid by a federal executive agency. |
Exemption from FATCA reporting code. The following codes identify payees
that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an
account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements.
AAn organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
BThe United States or any of its agencies or instrumentalities
CA state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities
DA corporation the stock of which is regularly traded on one or more established securities markets, as described in Reg. section 1.1472-1(c)(1)(i)
EA corporation that is a member of the same expanded affiliated group as a
corporation described in Reg. section 1.1472-1(c)(1)(i)
FA dealer in securities, commodities, or derivative financial instruments
(including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state
GA real estate investment trust
HA regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment
Company Act of 1940
IA common trust fund as defined in section 584(a)
JA bank as defined in section 581
KA broker
LA trust
exempt from tax under section 664 or described in section 4947(a)(1)
MA tax exempt trust under a section 403(b) plan or section
457(g) plan
Part I. Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS
individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN.
If you are a single-member LLC that is disregarded as an entity separate from its owner (see Limited Liability Company (LLC) on page 2),
enter the owners SSN (or EIN, if the owner has one). Do not enter the disregarded entitys EIN. If the LLC is classified as a corporation or partnership, enter the entitys EIN.
Note. See the chart on page 4 for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from
your local Social Security Administration office or get this form online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer
Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer
Identification Number (EIN) under Starting a Business. You can get Forms W-7 and SS-4 from the IRS by visiting IRS.gov or by calling 1-800- TAX-FORM (1-800-829-3676).
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write Applied For in the space for the TIN, sign
and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are
subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note. Entering Applied For means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding
agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if items 1, 4, or 5 below indicate otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person
identified on the Name line must sign. Exempt payees, see Exempt payee code earlier.
Signature requirements. Complete the
certification as indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts opened before 1984 and broker
accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest,
dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are
merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real
estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other payments. You must
give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. Other payments include payments made in the course of the requesters trade or
business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party
network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments
(under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
Form W-9 (Rev. 8-2013) |
Page 4 |
What Name and Number To Give the Requester
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For this type of account: |
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Give name and SSN of: |
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Individual |
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The individual |
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Two or more individuals (joint account) |
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The actual owner of the account or, if combined funds, the first individual on the account 1 |
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Custodian account of a minor (Uniform Gift to Minors Act) |
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The minor 2 |
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a. The usual revocable savings trust (grantor is also trustee) |
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The grantor-trustee 1 |
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b. So-called trust account that is not a legal or valid trust under state law |
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The actual owner 1 |
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Sole proprietorship or disregarded entity owned by an individual |
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The owner 3 |
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Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulation section 1.671-4(b)(2)(i)(A)) |
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The grantor * |
For this type of account: |
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Give name and EIN of: |
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Disregarded entity not owned by an individual |
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The owner |
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A valid trust, estate, or pension trust |
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Legal entity 4 |
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Corporation or LLC electing corporate status on Form 8832 or Form 2553 |
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The corporation |
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10. |
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Association, club, religious, charitable, educational, or other tax-exempt organization |
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The organization |
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11. |
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Partnership or multi-member LLC |
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The partnership |
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12. |
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A broker or registered nominee |
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The broker or nominee |
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Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments |
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The public entity |
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Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)(B)) |
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The trust |
1 |
List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that persons number must be furnished. |
2 |
Circle the minors name and furnish the minors SSN. |
3 |
You must show your individual name and you may also enter your business or DBA name on the Business name/disregarded entity name line. You may use either your SSN or EIN (if you have one), but
the IRS encourages you to use your SSN. |
4 |
List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see
Special rules for partnerships on page 1. |
*Note. Grantor also must provide a Form W-9 to trustee of trust.
Note. If no name is circled when more than one name is listed, the number will be considered to be that
of the first name listed.
Secure Your Tax Records from Identity Theft
Identity theft occurs when someone uses your personal information such as your name, social security number (SSN), or other identifying information, without
your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
Protect your SSN,
Ensure your employer is
protecting your SSN, and
Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number
printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due
to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at
1-800-908-4490 or submit Form 14039.
For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.
Victims of identity theft who are experiencing economic harm or a system problem, or are seeking help in resolving tax problems that have not
been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate
business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email
or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse
of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration at 1-800-366-4484. You can
forward suspicious emails to the Federal Trade Commission at: spam@uce.gov or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).
Visit
IRS.gov to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal Revenue
Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the
acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting
the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering
their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your
TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties
may also apply for providing false or fraudulent information.
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The Depositary for the Offer is:
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By Registered or Certified Mail:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, New York 10272-2042 |
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By Express or Overnight Courier:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, New York 11219 |
Questions and requests for assistance may be directed to Georgeson Inc., the information agent for the Offer
(the Information Agent), at the address and telephone number set forth below. In addition, requests for additional copies of the Offer to Purchase, this Letter of Transmittal, the notice of guaranteed delivery and other tender offer
materials may be directed to the Information Agent. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be furnished promptly at Purchasers expense.
The Information Agent for the Offer is:
480 Washington Boulevard, 26th Floor
Jersey City, NJ 07310
Stockholders, Banks and Brokers
Call Toll Free: (866) 856-2826
Exhibit (a)(1)(iii)
NOTICE OF GUARANTEED DELIVERY
For Tender of All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
Pursuant to the Offer to Purchase dated December 30, 2014
by
CLEARWATER MERGER
SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON JANUARY 29, 2015 (ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015) UNLESS THE OFFER IS
EXTENDED.
This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as
defined below) if (i) certificates representing shares of common stock, par value $0.001 per share (the Shares), of Volcano Corporation, a Delaware corporation (Volcano), are not immediately available, (ii) the
procedure for book-entry transfer cannot be completed prior to 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015) (the Expiration Date, unless extended pursuant to
and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean the latest time and date at which the Offer, as so extended, will expire) or (iii) time will not permit all required documents to
reach American Stock Transfer & Trust Company, LLC (the Depositary) prior to the Expiration Date. This Notice of Guaranteed Delivery may be delivered by overnight courier or mailed to the Depositary. See Section 3 of the
Offer to Purchase (as defined below).
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By Registered or Certified Mail: |
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By Express or Overnight Courier: |
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, New York 10272-2042 |
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American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, New York 11219 |
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN SECTION 3 OF THE OFFER TO PURCHASE) UNDER THE INSTRUCTION THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE APPROPRIATE LETTER OF TRANSMITTAL.
The Eligible Institution that completes this Notice of Guaranteed Delivery
must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal (as defined below) or an Agents Message (as defined in Section 3 of the Offer to Purchase) and certificates for Shares (or Book-Entry
Confirmation, as defined in Section 2 of the Offer to Purchase) to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.
Ladies and Gentlemen:
The undersigned hereby tenders to Clearwater Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Philips Holding USA
Inc., a Delaware corporation and a wholly owned subsidiary of Koninklijke Philips N.V., a corporation organized under the laws of The Netherlands, upon the terms and subject to the conditions set forth in the offer to purchase, dated
December 30, 2014 (as it may be amended or supplemented from time to time, the Offer to Purchase), and the related letter of transmittal (as it may be amended or supplemented from time to time, the Letter of Transmittal
and, together with the Offer to Purchase, the Offer), receipt of which is hereby acknowledged, the number of Shares of Volcano specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
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Number of Shares and Certificate No(s). (if
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¨ Check here if Shares will be tendered by book-entry transfer. |
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Notice of Guaranteed Delivery |
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GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution, hereby guarantees delivery to the Depositary, at one of its addresses set forth above, of
certificates representing the Shares tendered hereby, in proper form for transfer, or a Book-Entry Confirmation of the Shares tendered hereby into the Depositarys account at The Depository Trust Company (pursuant to the procedures set
forth in Section 3 of the Offer to Purchase), in each case together with a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, or, in the case of book-entry transfers of Shares, either
such Letter of Transmittal or an Agents Message in lieu of such Letter of Transmittal, and any other documents required by the Letter of Transmittal, within three NASDAQ Global Select Stock Market trading days after the date of execution of
this Notice of Guaranteed Delivery.
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Title: |
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DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE. CERTIFICATES REPRESENTING TENDERED SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. |
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Exhibit (a)(1)(iv)
Offer To Purchase For Cash
All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
by
CLEARWATER MERGER SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JANUARY 29, 2015
(ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015) UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Clearwater Merger Sub, Inc., a Delaware corporation
(Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation (Parent) and a wholly owned subsidiary of Koninklijke Philips N.V., a corporation organized under the laws of The Netherlands
(Royal Philips), to act as information agent in connection with Purchasers offer to purchase all of the shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock (such rights,
together with such shares of common stock, the Shares), of Volcano Corporation, a Delaware corporation (Volcano), that are issued and outstanding at a price of $18.00 per Share, net to the seller in cash (the Offer
Price), without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 30, 2014 (as it may be amended or supplemented from time to time, the
Offer to Purchase), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the Letter of Transmittal and, together with the Offer to Purchase, the Offer) enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.
THE BOARD OF DIRECTORS OF VOLCANO UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS TENDER ALL OF THEIR SHARES PURSUANT TO THE OFFER.
The Offer is not subject to any financing condition. The conditions of the Offer are described in Section 15 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your
nominee, we are enclosing the following documents:
1. The Offer to Purchase;
2. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your
clients, together with the included IRS Form W-9;
3. A notice of guaranteed delivery to be used to accept the
Offer if Shares and all other required documents are not immediately available or cannot be delivered to American Stock Transfer & Trust
Company, LLC (the Depositary) by 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015) (the Expiration
Date, unless Purchaser extends the Offer pursuant to and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean the latest time and date at which the Offer, as so extended, will expire)) or
if the procedure for book-entry transfer cannot be completed by the Expiration Date (the Notice of Guaranteed Delivery);
4. A form of letter that 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;
5. Volcanos Solicitation/Recommendation Statement on Schedule 14D-9; and
6. A return envelope addressed to the Depositary for your use only.
We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at 12:00
midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015), unless the Offer is extended.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of December 16, 2014 (as it may be amended or supplemented
from time to time in accordance with its terms, the Merger Agreement), by and among Parent, Purchaser and Volcano, pursuant to which, immediately following the time Purchaser accepts, for the first time, for payment Shares validly
tendered and not properly withdrawn pursuant to the Offer (the Offer Acceptance Time) and subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, Purchaser will merge with and into Volcano
(the Merger), with Volcano continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent. At the effective time of the Merger (the Effective Time), each Share then outstanding (other than
Shares that are held by any stockholders who properly demand appraisal in connection with the Merger as described in the Offer to Purchase) will be converted into the right to receive the Offer Price, without interest, less any applicable
withholding taxes, except for Shares then owned by Parent, Purchaser or any other wholly owned subsidiary of Parent and Shares held by Volcano or by any of its wholly owned subsidiaries, which Shares will be cancelled and retired and will cease to
exist, and no consideration will be delivered in exchange therefor.
After careful consideration, the board of directors of Volcano has
unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the Merger
will be subject to Section 251(h) of the General Corporation Law of the State of Delaware; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated
thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their shares to Purchaser pursuant to the Offer.
For Shares to be properly tendered pursuant to the Offer, (a) the share certificates or confirmation of receipt of such Shares under the
procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or, in the case of book-entry transfers, either such Letter of Transmittal or an Agents
Message (as defined in Section 3 of the Offer to Purchase) in lieu of such Letter of Transmittal, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder
must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and the Letter of Transmittal. You may gain some additional time by making use of the Notice of Guaranteed Delivery.
Except as set forth in the Offer to Purchase, Purchaser will not pay any fees or commissions to any broker or dealer or other person for
soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding
the offering material to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.
2
You may contact us as Information Agent with questions and requests for assistance, and for
additional copies of the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials, at the address and telephone number set forth on the back cover of the Offer to Purchase.
Very truly yours,
Georgeson Inc.
Nothing contained herein or in the enclosed documents shall render you the agent of Purchaser, Parent, Volcano, the Information Agent, or
the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained
therein.
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Exhibit (a)(1)(v)
Offer To Purchase For Cash
All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
Pursuant to the Offer to Purchase dated December 30, 2014
by
CLEARWATER MERGER
SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JANUARY 29, 2015 (ONE MINUTE AFTER
11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015) UNLESS THE OFFER IS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE EXPIRATION DATE).
December 30, 2014
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated December 30, 2014 (as it may be amended or supplemented from time to
time, the Offer to Purchase), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the Letter of Transmittal and, together with the Offer to Purchase, the Offer) in
connection with the offer by Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation (Parent) and a wholly owned subsidiary of
Koninklijke Philips N.V., a corporation organized under the laws of The Netherlands (Royal Philips), to purchase all of the shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock
(such rights, together with such shares of common stock, the Shares), of Volcano Corporation, a Delaware corporation (Volcano), that are issued and outstanding at a price of $18.00 per Share, net to the seller in cash (the
Offer Price), without interest, less any applicable withholding taxes, upon the terms and subject to the conditions of the Offer.
THE BOARD OF DIRECTORS OF VOLCANO UNANIMOUSLY RECOMMENDS THAT YOU TENDER ALL OF YOUR SHARES PURSUANT TO THE OFFER.
We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by
us as the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.
Please note carefully the following:
1. The Offer Price for the Offer is $18.00 per Share, net to you in cash, without interest, less any applicable withholding
taxes.
2. The Offer is being made for all outstanding Shares.
3. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of December 16, 2014 (as such may
be amended or supplemented from time to time, the Merger Agreement), by and among Parent, Purchaser and Volcano, pursuant to which, immediately following the time Purchaser accepts, for the first time, for payment Shares validly tendered
and not properly withdrawn pursuant to the Offer (the Offer Acceptance Time) and subject to the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, Purchaser will merge with and into Volcano (the
Merger), with Volcano continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent. At the effective time of the Merger (the Effective Time), each Share then outstanding (other than Shares
that are held by any stockholders who properly demand appraisal in connection with the Merger as described in the Offer to Purchase) will be converted into the right to receive the Offer Price, without interest, less any applicable withholding
taxes, except for Shares then owned by Parent or Purchaser or any other wholly owned subsidiary of Parent and Shares held by Volcano or any of its wholly owned subsidiaries, which Shares will be cancelled and retired and will cease to exist, and no
consideration will be delivered in exchange therefor.
4. After careful consideration, the board of directors of Volcano
has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the
Merger will be subject to Section 251(h) of the General Corporation Law of the State of Delaware; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions
contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the stockholders of Volcano tender their Shares to Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, Eastern time, on January 29, 2015 (one minute after
11:59 P.M., Eastern time, on January 28, 2015), unless the Offer is extended.
6. The Offer is not subject to any
financing condition. The Offer is conditioned upon: (i) there being validly tendered (not including any Shares tendered pursuant to guaranteed delivery procedures that were not actually delivered prior to the Expiration Date) and not validly
withdrawn prior to the Expiration Date Shares that, considered together with all other Shares (if any) beneficially owned by Parent and its subsidiaries immediately prior to the Offer Acceptance Time, represent one Share more than 50% of the sum of
(x) the total number of Shares outstanding at the time of the expiration of the Offer and (y) the aggregate number of Shares that Volcano may be required to issue upon conversion, settlement or exercise of all then outstanding options,
benefit plans, obligations or securities convertible or exchangeable into Shares, or other rights to acquire or be issued Shares (including all then outstanding options granted or outstanding under Volcanos equity plans, warrants to purchase
Shares and convertible notes issued by Volcano), for which Volcano has received notices of exercise or conversion prior to the expiration of the Offer (and as to which Shares have not yet been issued); (ii) receipt of any consent, approval or
clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder and
approvals under applicable foreign antitrust, competition or fair trade laws in certain jurisdictions set forth in the Merger Agreement and (iii) other customary conditions as described in Section 15 of the Offer to Purchase.
7. Any transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, then please so instruct us by
completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, then all such Shares will be tendered
unless otherwise specified on the Instruction Form.
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Your prompt action is requested. Your Instruction Form should be forwarded to us in ample
time to permit us to submit the tender on your behalf before the Expiration Date.
The Offer is not being made to (and no tenders will
be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However,
Purchaser may, in its discretion, take such action as it deems necessary to make the Offer comply with the laws of any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction in compliance with applicable laws.
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INSTRUCTION FORM
With Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
Pursuant to the Offer to Purchase dated December 30, 2014
by
CLEARWATER MERGER
SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated December 30, 2014 (as it may be amended
or supplemented from time to time, the Offer to Purchase), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, and together with the Offer to Purchase, the Offer), in connection with
the offer by Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a Delaware corporation and a wholly owned subsidiary of Koninklijke Philips N.V., a corporation
organized under the laws of The Netherlands, to purchase all of the shares of common stock, par value $0.001 per share, including any associated rights to purchase capital stock (such rights, together with such shares of common stock, the
Shares), of Volcano Corporation, a Delaware corporation, that are issued and outstanding at a price of $18.00 per Share, net to the seller in cash, without interest, less any applicable withholding taxes, upon the terms and subject to
the conditions of the Offer.
The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no
number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The undersigned understands and acknowledges that all questions as to the validity, form and
eligibility (including time of receipt) and acceptance for payment of any tender of Shares made on behalf of the undersigned will be determined by Purchaser in its sole discretion.
ACCOUNT
NUMBER:
NUMBER OF SHARES BEING TENDERED HEREBY:
SHARES*
The method of delivery of this Instruction Form is at the election and risk of the tendering stockholder. This Instruction Form
should be delivered to us in ample time to permit us to submit the tender on your behalf prior to 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015), unless the Offer is
extended.
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Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. |
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Exhibit (a)(1)(vi)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined
below) is made solely by the Offer to Purchase (as defined below) and the related Letter of Transmittal (as defined below) and any amendments or supplements thereto. The Offer is not being made to (and no tenders will be accepted from or on behalf
of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. Purchaser (as defined below) may, in its
discretion, take such action as it deems necessary to make the Offer to holders of Shares in any such jurisdiction in compliance with such applicable laws. In those jurisdictions where applicable laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
and the Associated Rights to Purchase Capital Stock
of
VOLCANO CORPORATION
at
$18.00 Net
per Share
by
CLEARWATER MERGER SUB, INC.,
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.,
a wholly owned subsidiary of
KONINKLIJKE PHILIPS N.V.
Clearwater Merger Sub, Inc., a Delaware corporation (Purchaser) and a wholly owned subsidiary of Philips Holding USA Inc., a
Delaware corporation (Parent) and a wholly owned subsidiary of Koninklijke Philips N.V., a corporation organized under the laws of The Netherlands (Royal Philips), is offering to purchase all of the shares of common stock,
par value $0.001 per share, including any associated rights to purchase capital stock (such rights, together with such shares of common stock, the Shares), of Volcano Corporation, a Delaware corporation (Volcano), that are
issued and outstanding at a price of $18.00 per Share, net to the seller in cash (the Offer Price), without interest, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the offer to purchase,
dated December 30, 2014 (as it may be amended or supplemented from time to time, the Offer to Purchase), and in the related letter of transmittal (as it may be amended or supplemented from time to time, the Letter of
Transmittal and, together with the Offer to Purchase, the Offer). Tendering stockholders who have Shares registered in their names and who tender directly to American Stock Transfer & Trust Company, LLC (the
Depositary) will not be obligated to pay brokerage fees, commissions or, except as set forth in the Letter of Transmittal, stock transfer taxes on the sale of Shares to Purchaser pursuant to the Offer. Stockholders with Shares held in
street name by a broker, dealer, commercial bank, trust company or other nominee should consult with their nominee to determine if they will be charged any service fees or commissions.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON JANUARY 29, 2015
(ONE MINUTE AFTER 11:59 P.M., EASTERN TIME, ON JANUARY 28, 2015) UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of
December 16, 2014, by and among Parent, Purchaser and Volcano (as it may be amended or supplemented from time to time in accordance with its terms, the Merger Agreement), pursuant to which, immediately following the time Purchaser
accepts, for the first time, for payment Shares validly tendered and not properly withdrawn pursuant to the Offer (the Offer Acceptance Time) and subject to the satisfaction or waiver of the remaining conditions set forth in the Merger
Agreement, Purchaser will merge with and into Volcano (the Merger), with Volcano continuing as the surviving corporation in the Merger and as a wholly owned subsidiary of Parent. Because the Merger will be governed by Section 251(h)
of the General Corporation Law of the State of Delaware (DGCL), no stockholder vote will be required to consummate the Merger. At the effective time of the Merger, each Share then outstanding (other than Shares that are held by any
stockholders who properly demand appraisal in connection with the Merger as described in the Offer to Purchase) will be converted into the right to receive the Offer Price, without interest, less any applicable withholding taxes, except for Shares
then owned by Parent, Purchaser or any other wholly owned subsidiary of Parent, and Shares held by Volcano or by any of its wholly owned subsidiaries, which Shares will be cancelled and retired and will cease to exist, and no consideration will be
delivered in exchange therefor. As a result of the Merger, the Shares will cease to be publicly traded and Volcano will become directly wholly owned by Parent. The Merger Agreement is more fully described in the Offer to Purchase.
The Offer is not subject to any financing condition. The Offer is conditioned upon: (i) there being validly tendered (not
including any Shares tendered pursuant to guaranteed delivery procedures that were not actually delivered prior to 12:00 midnight, Eastern time, on January 29, 2015 (one minute after 11:59 P.M., Eastern time, on January 28, 2015) (the
Expiration Date, unless Purchaser extends the Offer pursuant to and in accordance with the terms of the Merger Agreement, in which event Expiration Date will mean the latest time and date at which the Offer, as so extended by
Purchaser, will expire)) and not validly withdrawn prior to the Expiration Date Shares that, considered together with all other Shares (if any) beneficially owned by Parent and its subsidiaries immediately prior to the Offer Acceptance Time,
represent one Share more than 50% of the sum of (A) the total number of Shares outstanding at the time of the expiration of the Offer and (B) the aggregate number of Shares that Volcano may be required to issue upon conversion, settlement
or exercise of all then outstanding options, benefit plans, obligations or securities convertible or exchangeable into Shares, or other rights to acquire or be issued Shares (including all then outstanding options granted or outstanding under
Volcanos equity plans, warrants to purchase Shares and convertible notes issued by Volcano), for which Volcano has received notices of exercise or conversion prior to the expiration of the Offer (and as to which Shares have not yet been
issued) (the Minimum Condition); (ii) receipt of any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder (the HSR Act) and approvals under applicable foreign antitrust, competition or fair trade laws in certain jurisdictions set forth in the
Merger Agreement (the Antitrust Condition); and (iii) other customary conditions as described in Section 15 of the Offer to Purchase.
THE BOARD OF DIRECTORS OF VOLCANO UNANIMOUSLY RECOMMENDS THAT YOU
TENDER ALL OF YOUR SHARES PURSUANT TO THE OFFER.
After careful consideration, the board of directors of Volcano (the Volcano Board) has unanimously (i) determined that the
Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable to, and in the best interest of, Volcano and its stockholders; (ii) agreed that the Merger will be subject to Section 251(h) of
the DGCL; (iii) approved the execution, delivery and performance by Volcano of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the
stockholders of Volcano tender their Shares to Purchaser pursuant to the Offer.
The Offer to Purchase, the Letter of Transmittal
and Volcanos Solicitation/Recommendation Statement on Schedule 14D-9 (which contains the recommendation of the Volcano Board and the reasons therefor) contain important information. Stockholders should carefully read these documents in
their entirety before making a decision with respect to the Offer.
2
Purchaser and Parent may waive any condition, in whole or in part, other than the Minimum
Condition, at any time and from time to time, without Volcanos consent. If the conditions of the Offer have not been satisfied or waived and the Merger Agreement has not been terminated, Purchaser may extend the Offer on one or more occasions,
for an additional period of up to ten business days per extension, until all conditions of the Offer have been satisfied or waived. If the conditions of the Offer have not been satisfied or waived and the Merger Agreement has not been terminated,
Volcano may require Purchaser to extend the Offer on one or more occasions, for an additional period of up to ten business days per extension, until all conditions of the Offer have been satisfied or waived. In addition, Purchaser will extend the
Offer either (i) for the minimum period required by any legal requirement, interpretation or position of the Securities and Exchange Commission or its staff or NASDAQ or its staff or (ii) for periods of up to ten business days per
extension until any waiting period (and any extension thereof) applicable to the consummation of the Offer under the HSR Act and any foreign antitrust or competition-related legal requirement has expired or been terminated. However, in no event will
Purchaser be required to extend the Offer beyond the Extension Deadline, which is the earliest to occur of (x) the valid termination of the Merger Agreement and (y) June 16, 2015.
Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement
thereof, such announcement in the case of an extension to be made no later than 9:00 A.M., Eastern time, on the next business day after the previously scheduled Expiration Date.
There will not be a subsequent offering period for the Offer. Pursuant to the Merger Agreement, subject to the satisfaction of the Minimum
Condition and the satisfaction or waiver of the remaining conditions set forth in the Merger Agreement, Purchaser, Parent and Volcano will take all necessary and appropriate action to cause the Merger to become effective immediately following the
Offer Acceptance Time. Because the Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger. Subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement,
Purchaser, Parent and Volcano have agreed to cause the Merger to become effective immediately following the Offer Acceptance Time. Purchaser does not expect there to be a significant period of time between the consummation of the Offer and the
consummation of the Merger.
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), as soon as practicable after the Expiration Date (but no later than 9:00 A.M., Eastern Time, on the first business day after the Expiration Date), Purchaser shall (and Parent shall cause
Purchaser to) accept for payment and promptly thereafter (but no later than the first business day after the Expiration Date) pay for all Shares validly tendered and not properly withdrawn prior to the Expiration Date 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, if and when Purchaser gives oral or written notice to the Depositary of Purchasers
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 Offer Price therefor with the
Depositary, which will act as agent for tendering stockholders of record 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 be paid with respect to the purchase of Shares pursuant to the Offer, regardless of any extension of the Offer or delay in making payment for Shares.
No alternative, conditional or contingent tenders will be accepted. 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) for Shares held as physical certificates, the certificates evidencing such Shares (the Share Certificates) or, for Shares held in book-entry form, confirmation
of a book-entry transfer of such Shares into the Depositarys account at The Depository Trust Company (DTC), pursuant to the procedures set forth in the Offer to Purchase, (ii) a properly completed and duly executed Letter
of Transmittal, together with any required signature guarantees or, in the case of book-entry transfers of Shares, either such Letter of Transmittal or an Agents Message (as defined in the Offer to Purchase) in lieu of such Letter of
Transmittal, and (iii) any other documents required by the Letter of Transmittal.
3
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date.
Thereafter, tenders of Shares are irrevocable, except that they may also be withdrawn after 60 days from the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer. For a
withdrawal to be proper and effective, a written notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover 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 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 the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares. Withdrawals of tendered Shares may not be rescinded, and
any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, Shares that have been properly withdrawn may be re-tendered at any time prior to the Expiration Date by following one of
the procedures described in the Offer to Purchase.
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.
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. None of Purchaser, the Depositary, the Information Agent (as defined
below) or any other person will be under any duty to give notification of any defects or irregularities in any tenders or in any notice of withdrawal or incur any liability for failure to give any such notification.
Volcano has provided Purchaser with Volcanos stockholder list and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase and the Letter of Transmittal will be mailed to record holders of Shares whose names appear on Volcanos stockholder list and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies and other nominees whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agencys security
position listing.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal
income tax purposes. In general, a United States Holder (as defined in the Offer to Purchase) of Shares will recognize gain or loss in an amount equal to the difference between such United States Holders adjusted federal income tax basis in
such Shares sold pursuant to the Offer or converted into the right to receive cash in the Merger and the amount of cash received therefor. For a more detailed description of certain U.S. federal income tax consequences of the Offer and the Merger,
see the Offer to Purchase. Each holder of Shares should consult its tax advisor about the particular tax consequences to such holder of tendering Shares pursuant to the Offer, exchanging Shares in the Merger or exercising appraisal rights.
The information required to be disclosed by Rule 14d-6(d)(1) under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
Questions and requests for assistance may be directed to Georgeson Inc., the
information agent for the Offer (the Information Agent), at the address and telephone number set forth below. In addition, requests for additional copies of the Offer to Purchase, the Letter of Transmittal, the notice of guaranteed
delivery and other tender offer materials may be directed to the Information Agent. Such copies will be furnished promptly at Purchasers expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for
assistance.
4
Except as set forth in the Offer to Purchase, neither Purchaser nor Parent will pay any fees or
commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust companies or other nominees will, upon request, be reimbursed by Purchaser for customary
mailing and handling expenses incurred by them in forwarding the Offer materials to their customers.
The Information Agent for the
Offer is:
480 Washington Boulevard, 26th Floor
Jersey City, NJ 07310
Stockholders, Banks and Brokers
Call Toll Free: (866) 856-2826
December 30, 2014
5
Exhibit (d)(2)
EXECUTION VERSION
GUARANTEE
Koninklijke Philips N.V., a corporation organized under the laws of the Netherlands (the Guarantor), hereby irrevocably and
unconditionally guarantees to Volcano Corporation, a Delaware corporation, the full and timely performance by Philips Holding USA Inc., a Delaware corporation (Parent), and Clearwater Merger Sub, Inc., a Delaware corporation
(Purchaser, and together with Parent, the Acquiring Companies), of their respective obligations under the Agreement and Plan of Merger, dated the date hereof (the Merger Agreement), by and among Parent, Target and
Purchaser, including payment obligations and agrees to take all actions which apply to affiliates of the Acquiring Companies under the Merger Agreement. If Parent or Purchaser fails to pay or perform any of their obligations under the Merger
Agreement when due, then Guarantors obligations under this Agreement shall become immediately effective and the Company may collect such obligations from Guarantor regardless of whether an action is brought against Parent or Purchaser. To the
fullest extent permitted by law, Guarantor hereby expressly and unconditionally waives any defenses arising by reason of presentment, demand for payment, notice of non-performance, dishonor and protest, notice of the obligation incurred and all
other notices of any kind. The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Guarantee are knowingly made in
contemplation of such benefits.
Dated December 16, 2014
[Signature page follows]
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KONINKLIJKE PHILIPS N.V. |
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By: |
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/s/ F.A. van Houten |
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Name: F.A. van Houten Title:
President & CEO Royal Philips |
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By: |
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/s/ R.H. Wirahadiraksa |
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Name: R.H. Wirahadiraksa Title: CFO
Royal Philips |
[Signature Page to
Guarantee]
Exhibit (d)(3)
Exhibit (d)(3)
EXECUTION VERSION
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT (Agreementis being entered into as of June 23, 2014 between VOLCANO CoRPORATION, a Delaware corporation (Volcano) and Philips
Electronics North America Corporation, a Delaware corporation (such corporation, collectively with Koninklijke Philips N.V. and each other direct or indirect subsidiary of Koninklijke Philips N.V., Philips).
In order to facilitate the consideration and negotiation of a possible negotiated transaction involving Volcano and
Philips (referred to collectively as the Parties and individually as a Party), each Party has either requested or may request access to certain non-public information regarding the other Party and the other
Partys subsidiaries. (Each Party, in its capacity as a provider of information, is referred to in this Agreement as the Provider; and each Party, in its capacity as a recipient of information, is referred to in this Agreement as
the Recipient.) This Agreement sets forth the Parties obligations regarding the use and disclosure of such information and regarding various related matters.
The Parties, intending to be legally bound, acknowledge and agree as follows:
1. Limitations on Use and Disclosure of Confidential Information. Subject to Section 4 below, neither the Recipient nor any of the Recipients Representatives (as defined in
Section 13 below) will, at any time, directly or indirectly:
(a) make use of any of the Providers
Confidential Information (as defined in Section 12 below), except for the specific purpose of considering, evaluating and negotiating a possible negotiated transaction between the Parties; or
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disclose any of the Providers Confidential Information to any other |
Person (as defined in Section 13 below).
The Recipient will be liable and responsible for any breach of the provisions of this Agreement by any of its Representatives. The Recipient will (at its own expense) take all actions
necessary to restrain its Representatives from making any unauthorized use or disclosure of any of the Providers Confidential Information.
2. Provider Contact Person. Any request by the Recipient or any of its Representatives to review any of the Providers Confidential Information must be directed to the individual(s)
identified opposite the name of the Provider on EXHIBIT A or any investment banks or outside legal counsel retained by the Provider in connection with the possible transaction (any
such individual(s) or entity, a Provider contact person). Neither the Recipients Representatives will
contact or otherwise communicate with any other
Representative or employee of the Provider in connection with
a possible transaction without the
prior written authorization of a Provider Contact Person.
3. No
Representations by Provider. The Provider Contact Person will have the exclusive authority to decide what Confidential Information (if any) of the Provider is to be made available to the Recipient and its Representatives. Other than as set forth in
a Definitive Agreement (as herein defined), neither the Provider nor any of the Providers Representatives will be under any obligation to make any particular Confidential Information of the Provider available to the Recipient or any of the
Recipienfs Representatives or to supplement or update any Confidential Information of the Provider previously furnished. Other than as set forth in a
Definitive Agreement, neither the Provider nor any of its Representatives has made or is making any representation or warranty, express or implied, as to the accuracy or completeness of
any of the Providers Confidential Information, and neither the Provider nor any of its Representatives will have any liability to the Recipient or to any of the Recipients Representatives on any basis (including, without limitation, in
contract, tort or under United States federal or state securities laws or otherwise) relating to or resulting from the use of any of the Providers Confidential Information or any inaccuracies or errors therein or omissions therefrom. Only
those representations and warranties (if any) that are included in any final definitive written agreement that provides for the consummation of a negotiated transaction between the Parties and is validly executed on behalf of the Parties (a
Definitive Agreement) will have legal effect.
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Permitted Disclosures. |
(a) |
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Notwithstanding the limitations set forth in Section 1 above: |
(i) the Recipient may disclose Confidential Information of the Provider if and to the extent that the Provider consents in
writing to the Recipients disclosure thereof;
(ii) subject to Section 4(b) below, the Recipient may
disclose Confidential Information of the Provider to any Representative of the Recipient, but only to the extent such Representative (A) needs to know such Confidential Information for the purpose of helping the Recipient evaluate or negotiate
a possible negotiated
transaction between the Parties, and (B) has been provided with a copy of this
Agreement
and has agreed to abide and be bound by the provisions hereof or is otherwise bound by
confidentiality obligations at least as restrictive as those contained in this Agreement; and
(iii) subject to
Section 4(c) below, the Recipient may disclose Confidential Information of the Provider to the extent required by applicable law or governmental regulation or by valid legal process.
(b) If prior to providing certain Confidential Information to the Recipient, the Provider delivers to the Recipient a
written notice stating that such Confidential Information of.the Provider may be disclosed-enly-to-specified-Representati:ves o£ the Recipient, then, notwithstanding anything to the contrary contained in Section 4(a) (ii) above, the
Recipient shall not thereafter disclose or permit the disclosure of any of such Confidential Information to any other Representative of the Recipient.
(c) If the Recipient or any of the Recipients Representatives is required by law or governmental regulation or by subpoena or other valid legal process to disclose
SCI :3667491.3
any of the
Providers Confidential Information to any Person, then the Recipient will promptly provide the Provider with written notice of the applicable law, regulation or process so that the Provider may seek a protective order or other appropriate
remedy. To the extent legally permissible, the Recipient and its Representatives will cooperate reasonably with the Provider and the Providers Representatives in any attempt by the Provider to obtain any such protective order or other remedy.
If the Provider elects not to seek, or is unsuccessful in obtaining, any such protective order or other remedy in connection with any requirement that the Recipient disclose Confidential Information of the Provider, and if the Recipient furnishes
the Provider with a written advice of reputable external legal counsel confirming that the disclosure of such Confidential Information is legally required, then the Recipient may disclose such Confidential Information to the extent legally required;
provided, however, that the Recipient and its Representatives will use their reasonable best efforts to ensure that such Confidential Information is treated confidentially by each Person to whom it is disclosed.
5. Return of Confidential Information. Upon the Providers request, the Recipient and the Recipients
Representatives will promptly deliver to the Provider any of the Providers Confidential Information (and all copies thereof) obtained or possessed by the Recipient or any
of the Recipients Representatives; provided, however, that, in lieu of delivering to the Provider
any written materials containing Confidential Information of the Provider, the Recipient may destroy such written materials and deliver to the Provider a certificate confirming their
destruction provided further, that the Recipient may retain one copy of such Confidential Iilformation for archival purposes. Notwithstanding the delivery to the Provider (or the destruction by the Recipient) of Confidential Information ofthe
Provider pursuant to this
Section 5, the Recipient and its Representatives will continue to be bound by
their confidentiality obligations and other obligations under this Agreement.
6. Standstill Provision. During
the Standstill Period (as herein defined), Philips shall not, directly or indirectly through any of its Representatives:
(a) make, effect, initiate, cause or participate in (i) any acquisition of beneficial ownership of any securities of Volcano or any securities (including derivatives thereof) of any
subsidiary of Volcano, (ii) any acquisition of any assets of Volcano or any assets of any subsidiary or division of Volcano, (iii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation
or dissolution involving Volcano or any subsidiary of Volcano or involving any securities or assets of Volcano or any securities or assets of any subsidiary or division of Volcano, or (iv) any solicitation ofproxies (as
those terms are used in the proxy rules of the Securities
and Exchange Commission) or consents with respect to
any securities of Volcano;
(b) form;join-or- participate-in·a·group (as
defined-in the Securities Exchange Act of 1934, as amended (the Exchange Act), and the rules promulgated thereunder) with respect to the beneficial ownership of any securities ofVolcano or any subsidiary or division ofVolcano;
(c) |
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act, alone or in concert with others, to seek to control or change the |
composition of the board of directors of Volcano;
(d) take any action reasonably likely to require Volcano to make a public announcement regarding any of the types of matters set forth in clause (a) of this sentence;
(e) agree to take or publicly propose the taking of, any action referred to in clause (a),
(b), (c) or (d) of this sentence;
(f) |
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cause any other Person to take any action of the type referred to in clause |
(a), (b), (c), (d) or (e) ofthis sentence;
(g) |
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initiate any discussions or negotiations with any other Person intended to result in any of the foregoing; or
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(h) request or propose that Volcano or any of Volcanos Representatives amend or waive
any provision set forth in this Section 6.
Nothing in this Agreement will prevent Philips or its
Representatives from communicating with the Chief Executive Officer or the Chairman of the Board of Volcano to make a proposal for or to negotiate with Volcano in respect of a tender or exchange offer, merger or other business combination, or any
other of the transactions described in Section 6(a)(i) involving Volcano and Philips so long as such communication is made confidentially and does not require public disclosure. Following the end of the Standstill Period, nothing in this Agreement
(including the prohibitions on use and disclosure set forth in Sections 1 and 4 hereof) shall, directly or indirectly, prevent or otherwise limit Philips and its Representatives from taking any actions referred to in clauses (a)-(h) of this
Section 6 or related thereto, and in each case without notice to or consultation with Volcano. The expiration of the Standstill Period will not terminate or otherwise affect any of the other provisions of this Agreement.
The term Standstill Periotf, as used in this Agreement, means the a period of twelve months following the date
of this Agreement; provided, however, that the Standstill Period shall terminate automatically upon (i) any Person (A) becoming the beneficial owner (within the meaning of Section 13(d)(l) of the Exchange Act) of20% or more of the
outstanding equity securities of Volcano entitled to vote in the normal course in the election of the board of directors (Equity Securities) or (B) commencing a tender or exchange offer that, if consummated, would make such Person
(or any of its affiliates) the beneficial owner (within the meaning of Section 13(d)(l) of the Exchange Act) of
20% or more of the Equity Securities and Volcanos board of directors not recommending against stockholders tendering their shares into such offer within 10 business days after the
commencement of such offer or at any time thereafter at which it
publicly takes a new position with respect to
such offer, or (ii) Volcano entering into a
definitive agreement with a third party to effectuate
(A) a sale of 20% or more of the consolidated assets of Volcano and its wholly owned subsidiaries or (B) a transaction (I) that, in whole or in part, requires the approval of Volcanos stockholders and, (II) in which, based on
information publicly available at the time of announcement of the
entering
into of such agreement, the holders of the Equity Securities of Volcano prior to such transaction will not own, immediately following such transaction, at least 80% of the Equity Securities of either (x) the corporation resulting from such
transaction (the Surviving Corporation), or (y), if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of all of the outstanding Equity Securities of the Surviving Corporation.
7. No Obligation to Pursue Transaction. Unless the Parties enter into a Definitive Agreement, no agreement providing for a
transaction involving either of the Parties will be deemed to exist between the Parties, and neither Party will be under any obligation to negotiate or enter into any such agreement or transaction with the other Party. Each Party reserves the right,
in its sole discretion: (a) to conduct any process it deems appropriate with respect to any transaction or proposed transaction involving such Party and to modify any procedures relating
to any such process without giving notice to the other Party or any other Person; (b) to reject any
proposal made by the other Party or any of the other Partys Representatives with respect to a transaction involving
such Party; and (c) to terminate discussions and negotiations with the other Party at any time. Each Party recognizes that, except as expressly provided in any binding written agreement between the Parties that is executed on or after the date
of this Agreement:
(i) the other Party and its Representatives will be free to negotiate with, and to enter
into any agreement or transaction with, any other interested party; and (ii) such Party will not have any rights or claims against the other Party or any of the other Partys Representatives arising out of or relating to any transaction or
proposed transaction involving the other Party.
8. No Waiver. No failure or delay by either Party or any of
its Representatives in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, and no single or partial exercise of any such right, power or privilege will preclude any other or future exercise thereof or the
exercise of any other right, power or privilege under this Agreement. No provision of this Agreement can be waived or amended except by means of a written instrument that is validly executed on behalf of both of the Parties and that refers
specifically to the particular provision or provisions being waived or amended.
9. Remedies. Each Party
acknowledges that money damages would not be a sufficient remedy for any breach of this Agreement by such Party or by any of such Partys Representatives and that the other Party would suffer irreparable harm as a result of any such breach.
Accordingly, each Party will also be entitled to equitable relief, including injunction and specific performance, as a remedy for any breach or threatened breach of this Agreement by the other Party or any of the other Partys Representatives.
The equitable remedies referred to above will not be deemed to be the exclusive remedies for a breach of this Agreement, but rather will
be in addition to all other remedies available at law or in equity to the Parties. Trading in Securities. The Recipient acknowledges and agrees that it is aware (and that the
Recipients Representatives are aware or will be advised by the Recipient) that Confidential Information being furnished by the Provider may contain material, non-public information regarding the Provider and that the United States securities
laws prohibit any Person who has such material, non-public information from purchasing or selling securities of the Provider on the basis of such information or from communicating such information to any Person under circumstances in
which it
is reasonably foreseeable that such Person is likely to purchase or sell such securities on the basis of such information.
10. Successors and Assigns; Applicable Law; Jurisdiction and Venue. This Agreement will be binding upon and inure to the benefit of each Party and its Representatives and their respective
heirs, successors and assigns. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to principles of conflicts of laws). Each Party: (a) irrevocably and unconditionally
consents and submits to the jurisdiction of the state and federal courts located in the State of Delaware purposes of any action, suit or proceeding arising out of or relating to this Agreement; (b)
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or
proceeding arising out of or relating to this Agreement in any state or federal court located in the
State of Delaware; and (c) irrevocably and unconditionally waives the right to plead or claim, and irrevocably and
unconditionally agrees not to plead or claim, that any action, suit or proceeding arising out of or relating to this Agreement that is brought in any state or federal court located in the State of Delaware has been brought in an inconvenient forum.
11. |
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Confidential Information. For purposes of this Agreement, the Providers |
Confidential Information will be deemed to include only the following:
(a) any information (including any technology, know-how, patent application, test result, research study, business plan,
budget, forecast or projection) relating directly
or indirectly to the business of the Provider, any
predecessor entity or any subsidiary or
other affiliate of the Provider (whether prepared by the Provider or
by any other Person and whether or not in written form) that is or that has at any time been made available to the Recipient or any Representative of the Recipient by or on behalf of the Provider or any Representative of the Provider;
(b) any memorandum, analysis, compilation, summary, interpretation, study, report or other document, record or material
that is or has been prepared by or for the Recipient or any Representative of the Recipient and that contains any information of the type referred to in clause (a) of this sentence;
(c) the existence and terms of this Agreement, and the fact that information of the type referred to in clause
(a) of this sentence has been made available to the Recipient or any of its Representatives; and
(d) the fact that discussions or negotiations are or may be taking place with respect to a possible transaction involving
the Parties, and the proposed terms of any such transaction.
However, the Providers Confidential
Information will not be deemed to include:
(i) any information that is or becomes generally available to
the public other than as a direct or indirect result of the disclosure of any of such information by the Recipient or by any of the Recipients Representatives;
(ii) any
information that was in the Recipients possession prior to the time it was first made available to the Recipient or any of the Recipients Representatives by or on behalf of the Provider or any of the Providers Representatives,
provided that the source of such information was not and is not known to the Recipient to be bound by any contractual or other obligation of confidentiality to the Provider or to any other Person with respect to any of such information;
(iii) any information that becomes available to the Recipient on a non- confidential basis from a source other than the
Provider or any of the Providers Representatives, provided that such source is not known to the Recipient to be bound by any contractual or other obligation of confidentiality to the Provider or to any other Person with respect to any of such
information; or
(iv) any information that is developed by or on behalf of the Recipient independently of the
disclosure of Confidential Information and without reference to or use of Confidential Information.
12. |
|
Co-Bidders and Financing Sources. |
[Text Intentionally Deleted]
(a) For purposes of this Agreement, a Partys Representatives will be deemed to include each Person that is or becomes (i) a subsidiary of such Party, (ii) an
officer, director, employee, partner, attorney, investment banker, financial advisor, lender, advisor, accountant, agent or representative of such Party or of any of such
Partys subsidiaries (excluding any affiliated portfolio companies) or (iii) a potential debt
financing source to be used by Philips in connection with a potential negotiated transaction between the Parties, provided that any debt financing source enters into a confidentiality
agreement with Philips that include obligations relating to Volcanos
Confidential Information,
securities and employees that are at least as restrictive as the obligations in this Agreement (and providing that Volcano shall be a third party beneficiary thereof).
(b) The term Person, as used in this Agreement, will be broadly interpreted to include any individual and any corporation, partnership, entity, group, tribunal or governmental
authority.
(c) The bold-faced captions appearing in this Agreement have been included only for convenience and
shall not affect or be taken into account in the interpretation of this agreement.
(d) Any term or provision
of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
(e) By
making Confidential Information or other information available to the Recipient or the Recipients Representatives, the Provider is not, and shall not be deemed to be, granting (expressly or by implication) any license or other right under or
with respect to any patent, trade secret, copyright, trademark or other proprietary or
intellectual property
right. Neither the Recipient nor the Recipients Representatives
shall file any patent application
containing any claim to any subject matter derived from the Confidential Information of the Provider.
(t) To
the extent that any Confidential Information includes materials or other information that may be subject to the attorney-client privilege, work product doctrine or any other applicable privilege or doctrine concerning any Confidential Information or
any pending, threatened or prospective action, suit, proceeding, investigation, arbitration or dispute, it is acknowledged and agreed that the Parties have a commonality of interest
with respect to such Confidential Information or action, suit, proceeding, investigation, arbitration or dispute and that
it is the Parties mutual desire, intention and understanding that the sharing of such materials and other information is not intended to, and shall not, affect the confidentiality of any of such materials or other information or waive or
diminish the continued protection of any of such materials or other information under the attorney-client
privilege, work product doctrine or other applicable privilege or doctrine. Accordingly, all Confidential Information that is entitled to protection under the attorney- client privilege, work product doctrine
or other applicable privilege or doctrine shall remain entitled to protection thereunder and shall be entitled to protection under the joint defense doctrine, and the Parties agree to take all measures necessary to preserve, to the fullest extent
possible, the applicability of all such privileges or doctrines.
(g) This Agreement constitutes the entire
agreement between the Recipient and the Provider regarding the subject matter hereof and supersedes any prior agreement between the Recipient and the Provider regarding the subject matter hereof.
(h) This Agreement shall continue in full force and effect for a period of twelve months from the effective date of this
Agreement. The termination of this Agreement shall not relieve the Recipient of the obligations imposed by Sections 1, 4 5, 8 through 13 inclusive of this Agreement which shall survive any such termination and continue for a period of two years from
the date of execution of this Agreement or relieve Philips of its obligations under Section 6 of this Agreement. Nothing herein is intended to limit or abridge the protection of trade secrets under applicable trade secrets law, and the
protection of trade secrets by the Recipient shall be maintained as such until they fall into the public domain.
(i) |
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The Recipient agrees not to export, directly or indirectly, any U.S. source |
technical-data acquired- from- the Provideror-anyproducts-utilizing-such data to countries outside the United States,
which export may be in violation of the United States export laws or regulations.
(j) The Parties hereto
confirm their agreement that this Agreement, as well as any amendment hereto and all other documents related hereto, including legal notices,
shall be
in the English language only.
(k) This Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transaction or by facsimile shall be sufficient to bind the parties
to the terms and conditions of this Agreement.
The parties have caused this Agreement to be executed as of
June.
VOLCANO CORPORATION
By: darin lippoldt
darin lippoldt
EVP & GENERAL COUNCIL
PHILIPS ELECTRONICS NORTH AMERICA CORPORATION
BY:
SUP, CLO
Address:
3000 Minuteman Road, Bldg. 1 (MS 101)
Andover, MA 01810
United States of America
Address: 3721 valley
centre suite 507 sd, ca 92130
f
EXHIBIT A
PROVIDER CONTACT PERSON
VOLCANO CORPORATION:
SCOTT HUENNEKENS, PRESIDENT AND CEO
I 08202782 v1
SCI :3667491.3
Exhibit (d)(4)
EXECUTION COPY
December 16,
2014
R. Scott Huennekens
Volcano Corporation
3721 Valley Centre Drive, Suite 500
San
Diego, CA 92130
Dear Scott:
This is your CONSULTING AGREEMENT (this Agreement) with Clearwater
Merger Sub, Inc., a Delaware corporation (the Company). It sets forth the terms upon which you will render consulting services to the Company.
This Agreement is being entered into in connection with and as a condition to
the Agreement and Plan of Merger, dated December 16, 2014, among Volcano Corporation, a Delaware corporation (Volcano), Philips Holding USA Inc., a Delaware corporation and the Company (such Agreement and Plan of Merger, the
Merger Agreement). The Agreement shall become effective, and your engagement under this Agreement will begin on the date the merger provided for in the Merger Agreement becomes effective (the Start Date) and end
at the close of business on the five-month anniversary of the Start Date, unless earlier terminated in accordance with Section 7 (the Term).
However, if the Merger Agreement or your employment with Volcano terminates for any reason before the merger occurs, all of the provisions of
this Agreement will terminate and there will be no liability of any kind under this Agreement. You agree to remain employed by Volcano until the consummation of the merger contemplated in the Merger Agreement.
2. |
Termination of Employment. |
As of the Start Date, you shall cease to be an employee of
the Company, Volcano and their respective affiliates. In full settlement of the Companys, Volcanos and their respective affiliates obligations under your Amended and Restated Employment Agreement with Volcano, dated as of
February 12, 2014 (the Employment Agreement), the Company shall pay or provide to you the amounts and benefits set forth under Section 4(a)(ii) and Section 4(b) of the Employment Agreement, which shall include Cash
Severance, less the Pro-Rated Bonus in a single lump sum on the first regular payroll date following the
Severance Commencement Date (Cash Severance, Pro-Rated Bonus and Severance Commencement Date, each as defined in the Employment
Agreement). In accordance with Section 4(a)(ii)(1) of the Employment Agreement, the Company (a) shall pay you the Pro-Rated Bonus in a single lump sum at the time such bonus would have otherwise been paid had your employment not terminated
(but in no event later than March 15 of the year following the year in which the Start Date occurs); (b) shall pay the applicable COBRA premiums on behalf of you and your eligible dependents in accordance with Section 4(a)(ii)(2) of
the Employment Agreement for each month during the 24 month period following the Start Date, commencing with the first such month following the Start Date (the COBRA Payments) and (c) provide that to the extent you hold any
unvested equity awards as of the Start Date they shall become accelerated and vested as of the Start Date in accordance with Section 4(a)(ii)(3) and Section 4(b) of the Employment Agreement.
For the avoidance of doubt, payment of the Cash Severance, Pro-Rated Bonus and COBRA Payments shall, in accordance with Section 4(a)(ii)
of the Employment Agreement, be subject to the effectiveness and irrevocability of the Release as defined in the Employment Agreement. Notwithstanding the termination of the Employment Agreement or the Term of this Agreement, Section 5 of the
Employment Agreement shall survive in accordance with its terms which, for the avoidance of doubt, requires your continued compliance with Volcanos Information and Inventions Agreement and Patent, Copyright and Nondisclosure Agreement.
You acknowledge and agree that upon provision to you of the payments and benefits set forth under Section 4(a)(ii) and Section 4(b)
of the Employment Agreement, neither the Company, Volcano nor any of their respective affiliates has any current or future liabilities or obligations in respect of any payment or benefit owed to you under Section 4(a)(ii) or Section 4(b)
of the Employment Agreement.
You will provide such consulting services to the Company as
mutually agreed by you and the Company from time to time (the Consulting Services) for the lesser of (a) an average of 20 hours per week during the Term or (b) such level of services that is no greater than 20% of the
average level of services you provided to Volcano over the thirty-six (36) month period immediately prior to the Start Date.
You
agree to execute and comply with the Companys General Business Principles which are attached hereto.
4. |
Consulting Fee and Expense Reimbursement. |
In consideration for agreeing to provide the
Consulting Services over the Term, the Company will pay you a fee of $500,000 (your Consulting Fee), which will be paid in five equal monthly installments of $100,000. During the Term, at or around each monthly anniversary of the
Start Date, you will be required to submit to the Company (a) a bill for the $100,000 monthly fee and (b) a detailed
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written invoice of the reasonable business expenses incurred by you in connection with the performance of the Consulting Services, and such amounts shall be paid to you within 15 days of
submission thereof in accordance with reimbursement for business expenses being paid in accordance with the Companys reimbursement policies in effect from time to time.
Except as specifically provided herein, you will not be entitled
to any compensation or benefits from the Company or its affiliates with respect to the Consulting Services or otherwise and you will not be credited with any service, age or other credit for purposes of eligibility, vesting or benefit accrual under
any employee benefit plan of the Company or its affiliates.
6. |
Independent Contractor Status. |
You acknowledge and the Company agrees that in
performing services pursuant to this Agreement you will be acting and shall act at all times as an independent contractor only and not as an employee, agent, partner or joint venturer of or with the Company or its affiliates. Except as provided in
Section 2 of this Agreement with respect to the Cash Severance, you acknowledge that you are and shall be solely responsible for the payment of all Federal, state, local and foreign taxes that are required by applicable laws or regulations to
be paid with respect to all compensation and benefits payable or provided hereunder (including, without limitation, the Consultant Fees). Further, you understand that you will not be entitled to participate in or accrue benefits under any benefit
plan available to employees of the Company.
7. |
Termination of Agreement. |
The Company may terminate this Agreement and your services
to the Company during the Term with or without Cause (as defined below) at any time. You may not terminate this Agreement for any reason other than death.
|
1. |
Termination for Cause or Death. |
Upon a termination of your services by the Company for
Cause or as a result of death, the Company shall have no further obligation under this Agreement and, for the avoidance of doubt, shall not be required to pay to you any further Consultant Fees.
|
2. |
Termination without Cause. |
Upon a termination of your services by the Company without
Cause, the Company shall pay to you the unpaid Consultant Fees you would have received had you continued to perform the Consultant Services for the remainder of the Term, with such payment made in a single lump sum no later than 15 days after your
termination in accordance with this Section 7.
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Cause means (A) your continued
failure to substantially perform your services with the Company pursuant to Section 3 of this Agreement after the Company delivers to you a written demand for substantial performance or (B) your engaging in misconduct which is injurious to
the Company or its subsidiaries or affiliates financially, reputationally or otherwise.
Upon the expiration of the Term, you and the Company may agree to
extend the period during which you provide Consulting Services to the Company for a monthly Consulting Fee of $100,000, with such other terms of the consulting relationship as may mutually be agreed from time to time.
9. |
Proprietary Information |
1. Definition. Proprietary
Information means confidential or proprietary information, knowledge or data concerning (i) the Company or its affiliates businesses, strategies, operations, financial affairs, organizational matters, personnel matters, budgets,
business plans, marketing plans, studies, policies, procedures, products, ideas, processes, software systems, trade secrets and technical know-how, (ii) any other matter relating to the Company or its affiliates and (iii) any matter
relating to clients of the Company or its affiliates or other third parties having relationships with the Company or its affiliates. Proprietary Information includes (i) information regarding any aspect of your tenure as a consultant of the
Company or the termination of your engagement under this Agreement, (ii) the names, addresses, and phone numbers and other information concerning clients and prospective clients of the Company or its affiliates, information and materials
concerning the personal affairs of employees of the Company or its affiliates. In addition, Proprietary Information may include information furnished to you orally or in writing (whatever the form or storage medium) or gathered by inspection, in
each case before or after the date of this Agreement. However, Proprietary Information does not include information (i) that was or becomes generally available to the public, other than as a result of a disclosure by you, directly or
indirectly, or (ii) that you can establish was independently developed by you without reference to any Proprietary Information.
2.
Use and Disclosure. You will obtain or create Proprietary Information in the course of your involvement in the Companys or its affiliates activities and may already have Proprietary Information. You agree that the Proprietary
Information is the exclusive property of the Company, and that, during the Term, you will use and disclose Proprietary Information only for the Companys benefit and in accordance with any restrictions placed on its use or disclosure by the
Company. After the Term, you will not use or disclose any Proprietary Information. In addition, nothing in this Agreement will operate to weaken or waive any rights that the Company may have under statutory or common law, or any other agreement, to
the protection of trade secrets, confidential business information and other confidential information.
3. Limitations. Nothing in
this Agreement prohibits you from providing truthful testimony or information concerning the Company to governmental,
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regulatory or self-regulatory authorities or otherwise as required by law. Also, the parties (and their respective employees, representatives and agents) may disclose to any and all persons,
without any limitation of any kind, the tax treatment and tax structure of this Agreement and all materials of any kind (including opinions and other tax analysis) that are provided to either party related to such tax treatment and structure.
10. |
No Public Statements or Disparagement |
You agree, for yourself and others acting on
your behalf, that you (and they) will not intentionally disparage publicly, or make negative public statements about the Company or any of its incumbent or former officers, directors, agents, consultants, employees, successors and assigns. Nothing
in this provision shall prohibit you or any representative of the Company from testifying truthfully in response to a subpoena or other lawfully issued legal process.
This Section 11 applies to any controversy or claim between you and the
Company or its affiliates arising out of or relating to or concerning this Agreement or any aspect of your Consulting Services (together, a Consulting Dispute).
Subject to the provisions of this Section 11, any Consulting Dispute will be finally settled by arbitration in the County of San
Diego administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect. However, the rules will be modified in the following ways: (i) the decision must not be a compromise but must be the adoption
of the submission by one of the parties, (ii) each arbitrator will agree to treat as confidential evidence and other information presented, (iii) a decision must be rendered within 15 business days of the parties closing statements
or submission of post-hearing briefs and (iv) the arbitration will be conducted before a panel of three arbitrators, one selected by you within 10 days of the commencement of arbitration, one selected by the Company in the same period and the
third selected jointly by these arbitrators (or, if they are unable to agree on an arbitrator within 20 days of the commencement of arbitration, the third arbitrator will be appointed by the American Arbitration Association).
You and the Company agree that there will be no punitive damages payable as a result of any Consulting Dispute and agree not to request
punitive damages. The arbitrator may award attorneys fees and costs of the arbitration to the prevailing party.
You or the
Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in the County of San Diego to enforce any arbitration award under this Section 11.
You and the Company irrevocably submit to the exclusive jurisdiction of any state or federal court located in the County of San Diego over
any Consulting Dispute that is not otherwise arbitrated or resolved according to Section 11. Each of us hereby waives, and agrees not to assert, as a
-5-
defense that either of us, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. We each hereby agree that mailing of process or other papers in connection with
any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.
To the extent
permitted by law, you and the Company waive any and all rights to a jury trial with respect to any Consulting Dispute.
This
Agreement will be governed by and construed in accordance with the law of the State of California.
The Company may withhold from any payment due hereunder any taxes
that are required to be withheld under any law, rule or regulation.
The parties agree that this Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and the regulations promulgated thereunder (Section 409A) or an exemption from Section 409A. In the event that
after execution of this Agreement either party makes a determination inconsistent with the preceding sentence, it shall promptly notify the other party of the basis for its determination. The parties agree to renegotiate in good faith the terms of
this Agreement if you determine that this Agreement as structured would have adverse tax consequences to you. Notwithstanding anything in this Agreement to the contrary, if you are a specified employee as described in Section 409A
and the Treasury Regulations thereunder, and any amount to which you would otherwise be entitled during the first six months following your separation of service that constitutes nonqualified deferred compensation within the meaning of
Section 409A and that is therefore not exempt from Section 409A as involuntary separation pay or a short-term deferral, will be accumulated and paid (without interest) on the first business day of the seventh month following the date of
your separation from service. For purposes of this Agreement, each amount to be paid or benefit to be provided hereunder shall be construed as a separate identified payment for purposes of Section 409A. The termination of your employment
pursuant to Section 2 of this Agreement is intended to be a separation from service for purposes of Section 409A and will be treated as such by the parties. With respect to any reimbursements or other in-kind benefits provided
to you (i) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by you, (ii) any right to such reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.
This Agreement is personal to you and without
the prior written consent of the Company shall not be assignable by you otherwise than by will or the laws of descent and distribution. The Company may assign this Agreement to any of its affiliates at any time, provided that the Company shall
remain jointly liable for the obligations of any assignee hereunder. This Agreement shall inure to
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the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
Except as otherwise provided, this Agreement contains the entire agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, express or implied, between the parties with respect thereto. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. It is the parties intention that this Agreement not be construed more strictly with regard to you or the Company.
-7-
YOU ACKNOWLEDGE THAT YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL
COUNSEL CONCERNING THIS AGREEMENT, THAT YOU HAVE READ AND UNDERSTAND THIS AGREEMENT, THAT YOU ARE FULLY AWARE OF THIS AGREEMENTS LEGAL EFFECT, AND THAT YOU HAVE ENTERED INTO THIS AGREEMENT FREELY BASED ON YOUR OWN JUDGMENT AND NOT ON ANY
REPRESENTATION OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
|
|
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Clearwater Merger Sub, Inc. |
|
|
By: |
|
/s/ Joseph E. Innamorati |
Name: |
|
Joseph E. Innamorati |
Title: |
|
Vice President |
|
Accepted and Agreed as of the date hereof |
|
/s/ R. Scott Huennekens |
R. Scott Huennekens |
[Signature Page to R. Scott Huennekens Consulting Agreement]
-8-
Exhibit (d)(5)
EXECUTION COPY
December 16, 2014
Joseph Burnett
[at the address in the Schedule]
Dear Joe:
This is your RETENTION AGREEMENT (this Agreement) with Clearwater
Merger Sub, Inc., a Delaware corporation (the Company). It sets forth the terms of your employment with the Company.
Some of the terms of your employment are in the attached schedule (your
Schedule), which is part of this Agreement.
This Agreement is being entered into in connection with and as a condition
to the Agreement and Plan of Merger, dated December 16, 2014, among Volcano Corporation, a Delaware corporation (Volcano), Philips Holding USA Inc., a Delaware corporation and the Company (such Agreement and Plan of Merger,
the Merger Agreement). The Agreement shall become effective, and your employment under this Agreement will (a) begin on the date the merger provided for in the Merger Agreement becomes effective (the Start
Date) and (b) end at the close of business on the earlier of (1) the end of the Compensation Period stated in the Schedule or (2) the effective date of early termination of your employment. Once effective, this Agreement
supersedes and terminates any earlier agreements or arrangements, written or oral, with respect to the subject matter of this Agreement, including your current entitlements under the Volcano Officer Change in Control Severance Benefit Plan and any
other agreements or arrangements you have with Volcano relating to the subject matter herein.
However, if the Merger Agreement or your
employment with Volcano terminates for any reason before the merger occurs, all of the provisions of this Agreement will terminate and there will be no liability of any kind under this Agreement. You agree to remain employed by Volcano until the
consummation of the merger contemplated in the Merger Agreement. References in this Agreement to your employment are to your employment under this Agreement.
You will be employed in the position stated in your Schedule to this Agreement and your primary
work site will be at the Location stated in your Schedule. The Company may change your position from time to time, including by transferring you to an affiliate of the Company. You will have the authority, responsibilities and reporting
relationships that correspond to and are commensurate with your position, including any particular authority, responsibilities and reporting relationships that the Companys Board of Directors (the Board) or any officer of
the Company to whom you report may reasonably assign to you from time to time.
If you remain employed with the Company through the end of
the Compensation Period, then you will continue as an at will employee.
You agree to execute and comply with the
Companys General Business Principles and the Employee Ethics and Intellectual Property Agreement which are attached hereto.
2. |
Your Compensation and Benefits. |
1. Salary. During the Compensation
Period, you will receive an annual base salary (your Salary) and you will be eligible for a merit increase beginning in 2016. Your Salary is stated in your Schedule. Your Salary will be paid in accordance with the Companys
normal payroll practices.
2. Annual Bonus. You will be eligible to receive an annual cash bonus (your
Annual Bonus) for each fiscal year of the Company ending during your employment. The amount of your Annual Bonus will be determined by the Company in accordance with your Schedule.
3. Initial Equity Award. You will be awarded performance stock units under the Philips Annual Long Term Incentive Plan (the
LTIP and such award, your Initial Equity Award). The value of performance stock units comprising your Initial Equity Award and the vesting schedule for your Initial Equity Award is stated in the Schedule. Your
Initial Equity Award will be subject to the terms of the LTIP and to the terms of your award agreement under it.
4. April 2015 Equity Award. You will also be eligible to receive annual long-term incentive awards under the LTIP and will
be awarded performance stock units under the LTIP in April 2015 provided that the merger has occurred by that time (the April 2015 Equity Award). The value of performance stock units comprising your April 2015 Equity Award and the
vesting schedule for your April 2015 Equity Award is stated in the Schedule. Your April 2015 Equity Award will be subject to the terms of the LTIP and to the terms of your award agreement under it.
5. Cash Sign-on Bonus. You will be eligible to receive a special cash sign-on bonus (your Cash Sign-on Bonus)
equal to the amount set forth in the Schedule.
6. Cash Retention Bonus. You will be eligible to receive a special
cash retention bonus (your Cash Retention Bonus) equal to the amount set forth in the Schedule. You shall not receive any portion of your Cash Retention Bonus if you cease to be an employee of the Company prior to the applicable
payment date for any reason.
-2-
7. Other Benefits. During your employment, you will be entitled to participate in
such employee benefit plans and insurance programs offered by the Company to similarly situated employees in accordance with the eligibility requirements for participation in those programs. The Company may, in its sole discretion, provide for your
continued participation in Volcano employee benefit plans and insurance programs or, if it so elects, transition you to employee benefit plans and insurance programs sponsored by the Company in connection with integration of employee benefit
programs after the Start Date.
If your employment is terminated by the Company without Cause or by
you for Good Reason before the end of the Compensation Period stated in the Schedule, then, subject to your execution and delivery within 30 days of the date of your termination of the Companys then standard severance agreement applicable to
similarly situated employees which will contain reasonable and customary provisions, including, without limitation, general releases, and non-competition, non-solicitation, non-disparagement, confidentiality and conflict of interest provisions
substantially similar to those set forth in the General Business Principles and Employee Ethics and Intellectual Property Agreement] attached hereto (modified to reflect the terms of the Agreement), the Company will provide you with
the Severance Benefits described in your Schedule.
The Severance Benefits shall not be paid if the Company terminates your employment for
Cause, the end of the Compensation Period is reached, or you cease to be an employee of the Company as a result of your resignation for any reason or as a result of your death or physical or mental disability. For purposes of this Agreement, you
shall be deemed disabled, if by reason of a physical or mental illness or medical condition you have been unable to render the services required of you under this Agreement for a period of 180 days in any 12-month period.
4. |
Proprietary Information |
1. Definition. Proprietary
Information means confidential or proprietary information, knowledge or data concerning (i) the Company or its affiliates, businesses, strategies, operations, financial affairs, organizational matters, personnel matters, budgets,
business plans, marketing plans, studies, policies, procedures, products, ideas, processes, software systems, trade secrets and technical know-how, (ii) any other matter relating to the Company or its affiliates and (iii) any matter
relating to clients of the Company or its affiliates or other third parties having relationships with the Company or its affiliates. Proprietary Information includes (i) information regarding any aspect of your tenure as an employee of the
Company or the termination of your employment, (ii) the names, addresses, and phone numbers and other information concerning clients and prospective clients of the Company or its affiliates, information and materials concerning the personal
affairs of employees of the Company or its affiliates. In addition, Proprietary Information may include information furnished to you orally or in writing (whatever the form or storage medium) or gathered by inspection, in each case before or after
the date of this Agreement. However, Proprietary Information does not include information (i) that was or becomes generally available to the public, other than as a result of a disclosure by you, directly or indirectly, or (ii) that you can
establish was independently developed by you without reference to any Proprietary Information.
-3-
2. Use and Disclosure. You will obtain or create Proprietary Information in the course of
your involvement in the Companys or its affiliates activities and may already have Proprietary Information. You agree that the Proprietary Information is the exclusive property of the Company, and that, during your employment, you will
use and disclose Proprietary Information only for the Companys benefit and in accordance with any restrictions placed on its use or disclosure by the Company. After your employment, you will not use or disclose any Proprietary Information. In
addition, nothing in this Agreement will operate to weaken or waive any rights that the Company may have under statutory or common law, or any other agreement, to the protection of trade secrets, confidential business information and other
confidential information.
3. Limitations. Nothing in this Agreement prohibits you from providing truthful testimony or information
concerning the Company to governmental, regulatory or self-regulatory authorities or otherwise as required by law. Also, the parties (and their respective employees, representatives and agents) may disclose to any and all persons, without any
limitation of any kind, the tax treatment and tax structure of this Agreement and all materials of any kind (including opinions and other tax analysis) that are provided to either party related to such tax treatment and structure.
5. |
Ongoing Restrictions on Your Activities |
1. General Effect. This Section 5
applies during your employment with the Company under this Agreement and for a 12-month period after the end of your employment with the Company under this Agreement. This Section uses the following defined terms:
Competitive Enterprise means any business enterprise that either (i) develops, manufactures or
distributes any product, process or service that has the same or similar purpose or use as a product, process or service researched, discovered, developed, manufactured, imported, marketed, sold, offered for sale or used by the Company, including
but not limited to imaging systems using intravascular ultrasound, optical coherence tomography or spectroscopy, image guided therapy systems or devices or imaging systems using ultrasound generated within a body or (ii) holds a 5% or greater
equity, voting or profit participation interest in any enterprise that engages in such a competitive activity. A business enterprise engaged in Peripheral Vascular Therapeutics shall not be a Competitive Enterprise for purposes of this
Section 5.
Client means any client, supplier, distributor or prospective client, suppler or
distributor of the Company or its affiliates to whom you provided services, or for whom you transacted business, or whose identity became known to you in connection with your relationship with or employment by the Company or its affiliates.
Solicit means any direct or indirect communication of any kind, regardless of who initiates it, that in any
way invites, advises, encourages or requests any person to take or refrain from taking any action. A general employment advertisement by an entity of which you are a part is excluded from the definition of Solicit.
-4-
2. Your Importance to the Company and the Effect of this Section 5. You acknowledge that:
(a) In the course of your involvement in the Companys activities, you will have access to Proprietary Information
and the Companys client base and will benefit from the goodwill associated with the Company. On the other hand, in view of your access to Proprietary Information and your importance to the Company, if you compete with the Company or its
affiliates for some time after your employment, the Company will likely suffer significant harm. In return for the benefits you will receive from the Company and to induce the Company to enter into this Agreement, and in light of the potential harm
you could cause the Company, you agree to the provisions of this Section 5. The Company would not have entered into this Agreement or the Merger Agreement if you did not agree to this Section 5.
(b) In light of Section 5.2(a), if you breach any provision of this Section 5, the loss to the Company would be
material but the amount of loss would be uncertain and not readily ascertainable.
(c) This Section 5 limits your
ability to earn a livelihood in a Competitive Enterprise and your relationships with Clients. You acknowledge, however, that complying with this Section 5 will not result in severe economic hardship for you or your family.
3. Non-Competition. During your employment with the Company and for a 12-month period after the end of your employment with the Company
for any reason, you will not directly or indirectly:
(a) hold a 5% or greater equity, voting or profit participation
interest in a Competitive Enterprise except for ownership interests that represent a passive investment, where you do not in any way either directly or indirectly manage or exercise control over such entity, guarantee any of its financial
obligations or otherwise take any part in its business, other than exercising rights as a shareholder; or
(b) act as a
director, officer, employee, partner, consultant, agent, advisor, lender or guarantor of a Competitive Enterprise:
(i)
that is substantially related to any activity that you were engaged in,
(ii) that is substantially related to any
activity for which you had direct or indirect managerial or supervisory responsibility, or
(iii) that calls for the
application of specialized knowledge or skills substantially related to those used by you in your activities;
-5-
in each case, for the Company or its affiliates at any time during the year before the end
of your employment (or, if earlier, the year before the date of determination).
Notwithstanding the foregoing, you shall not be
precluded from participating in the Permitted Activities set forth in the Schedule, to the extent such activities do not interfere with your duties hereunder.
4. Non-Solicitation of Clients. During your employment with the Company and for a 12-month period after the end of your employment with
the Company for any reason, you will not:
(a) Solicit any Client to transact business with a Competitive Enterprise or to
reduce or refrain from doing any business with the Company and its affiliates (excluding any business that is not a material activity of the Company or its affiliates),
(b) transact business with any Client that would cause you to be a Competitive Enterprise or that would cause any Client to
reduce or refrain from doing any business with the Company or its affiliates, or
(c) interfere with or intentionally
damage any relationship between the Company and its affiliates and a Client.
5. Non-Solicitation of Employees. During your
employment with the Company and for a 12-month period after the end of your employment with the Company for any reason, you will not attempt to Solicit anyone who is then an employee of the Company or its affiliates (or who was an employee of the
Company or any of its affiliates within the prior three (3) months) to resign from the Company and its affiliates or to apply for or accept employment with any Competitive Enterprise, except that you may Solicit your administrative assistant.
6. Injunctive Relief. You acknowledge that the Company may be caused irreparable injury in the event of a breach of this
Section 5 and that money damages may not be an adequate remedy, and further agree that the Company shall be entitled to seek injunctive relief (in addition to its other remedies at law) to have the provisions of this Section 5
enforced (without the requirement to post a bond). It is hereby acknowledged that the provisions of this Section 5 are for the benefit of the Company and that the Company may enforce the provisions of this Section 5 and only the Company
can waive the rights hereunder with respect to its confidential information, Clients and employees.
7. Notice to New Employers.
Before you accept employment with any other person or entity while any of Sections 5.3, 5.4 or 5.5 is in effect, you will provide the prospective employer with written notice of the provisions of this Section 5 and will deliver a copy of the
notice to the Company.
6. |
No Public Statements or Disparagement |
You agree, for yourself and others acting on your
behalf, that you (and they) will not intentionally disparage publicly, or make negative public statements about the Company or any of its incumbent or former officers, directors, agents, consultants, employees, successors and assigns. Nothing in
this provision shall prohibit you from testifying truthfully in response to a subpoena or other lawfully issued legal process.
-6-
Subject to Section 5.6, this Section 7 applies to any controversy or
claim between you and the Company or its affiliates arising out of or relating to or concerning this Agreement or any aspect of your employment with the Company, its affiliates or Volcano or the termination of that employment (together, an
Employment Matter).
Subject to the provisions of Section 5.6 and this Section 7, any Employment Matter
will be finally settled by arbitration in the County of San Diego administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect. However, the rules will be modified in the following ways: (i) the
decision must not be a compromise but must be the adoption of the submission by one of the parties, (ii) each arbitrator will agree to treat as confidential evidence and other information presented, (iii) a decision must be rendered within
15 business days of the parties closing statements or submission of post-hearing briefs and (iv) the arbitration will be conducted before a panel of three arbitrators, one selected by you within 10 days of the commencement of arbitration,
one selected by the Company in the same period and the third selected jointly by these arbitrators (or, if they are unable to agree on an arbitrator within 20 days of the commencement of arbitration, the third arbitrator will be appointed by the
American Arbitration Association).
You and the Company agree that there will be no punitive damages payable as a result of any
Employment Matter and agree not to request punitive damages. The arbitrator may award attorneys fees and costs of the arbitration to the prevailing party.
You or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in the County of
San Diego to enforce any arbitration award under this Section 7.
You and the Company irrevocably submit to the exclusive
jurisdiction of any state or federal court located in the County of San Diego over any Employment Matter that is not otherwise arbitrated or resolved according to Section 7. Each of us hereby waives, and agrees not to assert, as a defense
that either of us, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. We each hereby agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be
permitted by law shall be valid and sufficient service thereof.
To the extent permitted by law, you and the Company waive any and all
rights to a jury trial with respect to any Employment Matter.
This Agreement will be governed by and construed in accordance with
the law of the State of California.
-7-
The Company may withhold from any payment due hereunder any taxes
that are required to be withheld under any law, rule or regulation.
The parties agree that this Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code) and the regulations promulgated thereunder (Section 409A) or an exemption from Section 409A. In the event that
after execution of this Agreement either party makes a determination inconsistent with the preceding sentence, it shall promptly notify the other party of the basis for its determination. The parties agree to renegotiate in good faith the terms of
this Agreement if you determine that this Agreement as structured would have adverse tax consequences to you. Notwithstanding anything in this Agreement to the contrary, if you are a specified employee as described in Section 409A
and the Treasury Regulations thereunder, and any amount to which you would otherwise be entitled during the first six months following your separation of service that constitutes nonqualified deferred compensation within the meaning of
Section 409A and that is therefore not exempt from Section 409A as involuntary separation pay or a short-term deferral, will be accumulated and paid (without interest) on the first business day of the seventh month following the date of
your separation from service. For purposes of this Agreement, each amount to be paid or benefit to be provided hereunder shall be construed as a separate identified payment for purposes of Section 409A.
This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you otherwise than by will
or the laws of descent and distribution. The Company may assign this Agreement to any of its affiliates at any time, provided that the Company shall remain jointly liable for the obligations of any assignee hereunder. This Agreement shall inure to
the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective
successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. It is the parties intention that this
Agreement not be construed more strictly with regard to you or the Company. Upon becoming effective on the Start Date, this Agreement shall supersede any other employment or severance agreement or arrangements or similar rights you may have with the
Company, Volcano or any of their affiliates (and you shall not be eligible for severance benefits under any other plan, program or policy of the Company).
Certain capitalized terms used herein have the meanings set forth in the Schedule hereto.
-8-
YOU ACKNOWLEDGE THAT YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL
COUNSEL CONCERNING THIS AGREEMENT, THAT YOU HAVE READ AND UNDERSTAND THIS AGREEMENT, THAT YOU ARE FULLY AWARE OF THIS AGREEMENTS LEGAL EFFECT, AND THAT YOU HAVE ENTERED INTO THIS AGREEMENT FREELY BASED ON YOUR OWN JUDGMENT AND NOT ON ANY
REPRESENTATION OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
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Clearwater Merger Sub, Inc. |
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By: |
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/s/ Joseph E. Innamorati |
Name: |
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Joseph E. Innamorati |
Title: |
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Vice President |
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Accepted and Agreed as of the date
hereof |
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/s/ Joseph Burnett |
Joseph Burnett |
[Signature Page to J. Burnett Retention Agreement]
-9-
J. BURNETT RETENTION AGREEMENT
SCHEDULE
(This Schedule constitutes part of the Retention Agreement)
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Name and address for
notices |
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Joseph Burnett [Address on file with the
Company] |
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Location |
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San Diego, California |
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Position |
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You shall initially be employed as Business Leader IGT Devices. |
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Compensation Period |
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Your Compensation Period will end on the second anniversary of your Start Date. |
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Salary |
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Your Salary will be $335,000, annually. |
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Annual Bonus |
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You will be eligible to receive an Annual Bonus in accordance with the terms of the Philips Annual Incentive Plan and the target level for your Annual Bonus will be at least 40% of your Salary. The actual amount of the Annual Bonus
you shall be entitled to receive shall be based upon achievement of the goals set by the Company in accordance with the Philips Annual Incentive Plan. |
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Initial Equity Award |
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You will be awarded restricted stock units with an aggregate grant date value of EUR 200,000 on the first grant date possible under the LTIP after your Start Date. Your Initial Equity Award will vest 50% on the second anniversary of
the grant date, and 50% on the third anniversary of the grant date. |
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April 2015 Equity Award |
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You will be awarded performance stock units with an aggregate grant date value of EUR 130,000 on the day 2015 long-term incentive awards are granted to similarly situated employees. Your April 2015 Equity Award will be subject to 3
year cliff vesting, subject to achievement of applicable performance metrics. |
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Cash Sign-on Bonus |
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You will receive a Cash Sign-on Bonus of $75,000 which will be paid to you in a cash lump sum within 30 days of the Start Date. |
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Cash Retention Bonus |
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You will receive a Cash Retention Bonus of $350,000 if you are employed by the Company upon the second anniversary of your Start Date. Such payment will be made within 30 days of such anniversary date. If your employment terminates
for any reason prior to the second anniversary of the Start Date then you will not be paid any portion of the Cash Retention Bonus. |
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Definition of Cause |
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Cause means your: (i) willful refusal to perform the duties and responsibilities reasonably assigned to you pursuant to Section 1 of the Agreement, (ii) engagement in illegal conduct or in gross misconduct,
in either case, that causes material financial or reputational harm to the Company or its affiliates, (iii) commission or conviction of, or plea of guilty or nolo contendere to, a felony, (iv) material breach of the Companys written
code of conduct and business ethics or (v) willful attempt to obstruct or failure to cooperate with any investigation authorized by the Board or any governmental or self-regulatory entity. With respect to subclauses (iv) and (v), the Company agrees
to give you notice and an opportunity to timely cure any breach which is susceptible to cure (as reasonably determined by the Company). |
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Definition of Good Reason |
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Good Reason means the existence of one of the following conditions without your express written consent, provided that (i) you have provided written notice to the Company as to the existence of such condition
within thirty (30) days after its initial existence, (ii) the Company fails to provide a reasonable cure to such condition within thirty (30) days after its receipt of such written notice (the Cure Period) and (iii) your
resignation from employment with the Company is effective not later than 30 days after expiration of the Cure Period where the Company has failed to reasonably cure the conditions: (A) a material diminution in your Salary. (B) the transfer of your
primary work site from the Location to a new location that increases your one-way commute to work by more than 50 miles, (C) a material diminution in your authority, duties or responsibilities or (D) a material diminution in the authority, duties,
or responsibilities of the supervisor to whom you are required to report. |
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Severance Benefits |
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If you are terminated by the Company without Cause or if you terminate your employment with Good Reason, in each case, prior to the end of
your Compensation Period, you shall receive the following benefits:
(1) The Company will pay you $480,000 in a cash lump sum within 30 days of your termination
date. |
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(2) If you timely elect to continue your Company-provided group health
insurance coverage pursuant to the federal COBRA law, the Company will reimburse you for the cost of such COBRA premiums, at the same level as you maintain as of the date of termination, through the end of the COBRA period (18 months), or until such
time as you qualify for health insurance benefits through a new employer, whichever occurs first. The reimbursement shall be for 100% of your COBRA premiums, as well as for your eligible dependents COBRA premiums, and the coverage to be
provided on this basis shall be health and dental coverage. You understand and agree
that if you are terminated for Cause or resign for any reason, you will not receive the aforementioned payments and benefits.
After the end of the Compensation Period, you will be eligible for severance benefits under the Philips Executive Severance Policy. |
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Permitted Activities |
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Service on Board of Directors of SensorCath, Inc. |
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