Jan. 3 2000 SEC filing for Bain / VMM Merger Corp
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Transcript of Jan. 3 2000 SEC filing for Bain / VMM Merger Corp
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ACCESSION NUMBER: 0000950131-00-000006
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 4
FILED AS OF DATE: 20000103
GROUP MEMBERS: BAIN CAPITAL FUND VI, L.P.
GROUP MEMBERS: BAIN CAPITAL INVESTORS VI, INC.
GROUP MEMBERS: BAIN CAPITAL PARTNERS VI, L.P.
GROUP MEMBERS: VMM MERGER CORP
GROUP MEMBERS: W. MITT ROMNEY
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: VDI MULTIMEDIA
CENTRAL INDEX KEY: 0001014733
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE &
VIDEO TAPE PRODUCTION [7812]
IRS NUMBER: 954272619
STATE OF INCORPORATION: CA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT:
SEC FILE NUMBER: 005-52979
FILM NUMBER: 500601
BUSINESS ADDRESS:
STREET 1: 6920 SUNSET BOULEVARD
CITY: HOLLYWOOD
STATE: CA
ZIP: 90028
BUSINESS PHONE: 2139575500
MAIL ADDRESS:
STREET 1: 6920 SUNSET BLVD
CITY: HOLLYWOOD
STATE: CAZIP: 90028
FORMER COMPANY:
FORMER CONFORMED NAME: VDI MEDIA
DATE OF NAME CHANGE: 19960516
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: VMM MERGER CORP
CENTRAL INDEX KEY: 0001102058
STANDARD INDUSTRIAL CLASSIFICATION: []
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
BUSINESS ADDRESS:
STREET 1: C/O BAIN CAPITAL INC
STREET 2: TWO COPLEY PLACE
CITY: BOSTON
STATE: MA
ZIP: 02116
BUSINESS PHONE: 6175722392
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MAIL ADDRESS:
STREET 1: C/O BAIN CAPITAL INC
STREET 2: TWO COPLEY PLACE
CITY: BOSTON
STATE: MA
ZIP: 02116
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. __ )/1/
VDI MultiMedia
------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
------------------------------------------------------
(Title of Class of Securities)
917916108
------------------------------------------------------
(CUSIP Number)
VMM Merger Corp.
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
(617) 572-3000
Attn: Joseph Pretlow
------------------------------------------------------
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
December 24, 1999
------------------------------------------------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [_]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
/1/ The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
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alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Page 1 of 15 Pages
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 917916108 PAGE 2 OF 15 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
VMM Merger Corp.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
5,376,400 (See Item 5)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 0
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
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5,376,400 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 58%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 917916108 PAGE 3 OF 15 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
Bain Capital Fund VI, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 5,376,400 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
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REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,376,400 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 58%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 917916108 PAGE 4 OF 15 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
Bain Capital Partners VI, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
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0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 5,376,400 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,376,400 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 58%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 917916108 PAGE 5 OF 15 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
Bain Capital Investors VI, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) or 2(e)
[_]
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- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 5,376,400 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,376,400 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 58%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 917916108 PAGE 6 OF 15 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1
W. Mitt Romney
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
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3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
OO
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) or 2(e)
[_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 5,376,400 (See Item 5)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,376,400 (See Item 5)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 58%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
The class of equity security to which this Statement relates is the common
stock, no par value (the "Common Stock") of VDI MultiMedia, a California
corporation (the "Company"). The name and address of the principal executive
offices of the Company are VDI MultiMedia, 6920 Sunset Boulevard, Hollywood,
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California 90028.
Item 2. Identity and Background.
This Statement is being jointly filed by each of the following persons
pursuant to Rule 13d-1(f) promulgated by the Securities and Exchange Commission
(the "Commission") pursuant to Section 13 of the Securities Exchange Act of 1934
as amended (the "Exchange Act"):
(i) VMM Merger Corp. ("VMM"), a Delaware corporation, by virtue of its deemed
beneficial ownership of 5,376,400 shares of Common Stock;
(ii) Bain Capital Fund VI, L.P. ("BCF VI"), a Delaware limited partnership, as
the sole stockholder of VMM;
(iii) Bain Capital Partners VI, L.P. ("BCP VI"), a Delaware limited
partnership, as the sole general partner of BCF VI;
(iv) Bain Capital Investors VI, Inc. ("BCI VI Inc."), a Delaware corporation,
as the sole general partner of BCP VI; and
(v) W. Mitt Romney ("Mr. Romney"), a citizen of the United States, as the sole
stockholder of BCI VI Inc.
The address of the principal business and office of VMM, BCF VI, BCP VI and
BCI VI Inc. is c/o Bain Capital Inc., Two Copley Place, Boston, Massachusetts
02116. VMM is a newly formed corporation that will be used to effect the
acquisition of the Company. BCF VI is principally engaged in the business of
investing in securities. BCP VI is principally engaged in the business of
serving as the general partner for BCF VI. BCI VI Inc. is principally engaged
in the business of serving as the general partner of BCP VI. Mr. Romney is
principally engaged in the business of serving as the sole stockholder of BCI VI
Inc. VMM, BCF VI, BCP VI, BCI VI Inc. and Mr. Romney are collectively referred
to herein as the "Reporting Persons." The Reporting Persons have entered into a
Joint Filing Agreement, a copy of which is filed with this Statement as Exhibit
C (which is incorporated herein by reference), pursuant to which the Reporting
Persons have agreed to file this Statement jointly in accordance with the
provisions of Rule 13d-1(f)(1) under the Exchange Act.
Information with respect to each Reporting Person is given solely by such
Reporting Person, and no Reporting Person assumes responsibility for the
accuracy or completeness of the information furnished by another Reporting
Person. Attached as Schedule A to this Statement is information concerning the
Reporting Persons to which such information is required to be disclosed in
response to Item 2 and General Instruction C to Schedule 13D.
The Reporting Persons may be deemed to constitute a "group" for the
purposes of Section 13(d)(3) of the Act as a result of such Reporting Persons
being persons associated with Bain Capital, Inc., a Delaware corporation ("Bain
Capital"), which is a management company. The Reporting
Page 7 of 15 Pages
Persons expressly disclaim that they have agreed to act as a group other than as
described in this Statement.
During the last five years, none of the Reporting Persons or the persons
identified on Schedule A attached hereto has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
During the last five years, none of the Reporting Persons or the persons
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identified on Schedule A attached hereto was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
any person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Item 4 hereof, VMM and R. Luke Stefanko and
Julia Stefanko (collectively, the "Shareholders") have entered into a
Shareholders Agreement, dated December 24, 1999 (the "Shareholders Agreement").
The transactions contemplated by the Shareholders Agreement prior to the
Effective Date (as defined in Item 4) are not expected to require the
expenditure of any funds. The Shareholders entered into the Shareholders
Agreement to induce VMM to enter into the Merger Agreement (as defined in Item
4).
Item 4. Purpose of Transaction.
On December 24, 1999, the Company, VDI MultiMedia, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company ("Company Sub"), and VMM
entered into an Agreement and Plan of Merger (the "Merger Agreement") providing
for (i) the merger of the Company with and into Company Sub (the "Reorganization
Merger"), whereupon the existence of the Company will cease and Company Sub will
continue as the surviving corporation, followed by (ii) the merger of VMM with
and into Company Sub (the "Acquisition Merger" and together with the
Reorganization Merger, the "Mergers"), whereupon the existence of VMM will cease
and Company Sub will continue as the surviving corporation (the "Surviving
Corporation").
At the effective time of the Reorganization Merger (the "Reorganization
Effective Time") and subject to certain limitations set forth in the Merger
Agreement, each share of Common Stock issued and outstanding immediately prior
to the Reorganization Effective Time (other than shares held by shareholders
exercising appraisal rights in accordance with applicable law) will, by virtue
of the Reorganization Merger and without any action on the part of the holder
thereof, be converted into one fully paid and nonassessable share of common
stock, $.01 par value per share, of Company Sub ("Company Sub Common Stock"). At
the Reorganization Effective Time, the holders of the outstanding shares of
Common Stock so converted will become holders of record of the shares of Company
Sub Common Stock issued in consideration therefor upon such conversion without
any further action on the part of such holders.
At the Reorganization Effective Time, each share of Company Sub Common
Stock issued and outstanding immediately prior to the Reorganization Effective
Time will, by virtue of the Reorganization Merger and without any action on the
part of the holder thereof, cease to be outstanding, be canceled and be retired
without payment of any consideration therefor and cease to exist.
At the Reorganization Effective Time, Company Sub will assume all of the
Company's obligations with respect to any then-outstanding Options (as defined
in the Merger Agreement) that
Page 8 of 15 Pages
have not expired or been duly exercised by the holders thereof and the due
exercise of rights under any such Options will entitle the holders thereof to
acquire, immediately following the Reorganization Merger, upon the same terms
and conditions that were applicable under such Options immediately prior to the
Reorganization Merger, a number of shares of Company Sub Common Stock identical
to the class and number of shares of Common Stock that were subject to the
Options immediately prior to the Reorganization Merger.
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At the effective time of the Acquisition Merger (the "Acquisition Effective
Time" and together with the Reorganization Effective Time, the "Effective Time")
and subject to certain limitations set forth in the Merger Agreement, each share
of Company Sub Common Stock issued and outstanding immediately prior to the
Acquisition Effective Time (other than Company Sub Common Stock owned by VMM or
any other subsidiary or affiliate of VMM (collectively, the "VMM Companies") or
the Rollover Shareholders (as defined in the Merger Agreement)) will, by virtue
of the Acquisition Merger and without any action on the part of the holder
thereof, be converted into the right to receive the sum of $15.00 in cash (the
"Merger Consideration"). All such Company Sub Common Stock converted according
to the preceding sentence will automatically be canceled and retired and will
cease to exist. The Merger Consideration will be financed by VMM through a
combination of equity financing to be provided by investment funds affiliated
with Bain Capital, including BCF VI, and certain other investors and senior and
subordinated debt financing to be provided by Credit Suisse First Boston and/or
other financing sources, which may include affiliates of Bain Capital.
At the Acquisition Effective Time, each share of Company Sub Common Stock
issued and outstanding at the Acquisition Effective Time and owned by the VMM
Companies, and each share of Company Sub Common Stock issued and held in Company
Sub's treasury at the Acquisition Effective Time, shall, by virtue of the
Acquisition Merger and without any action on the part of the holder thereof,
cease to be outstanding, be canceled and be retired without payment of any
consideration therefor and cease to exist.
At the Acquisition Effective Time, (i) each Rollover Share (as defined in
the Merger Agreement) and (ii) each share of common equity of VMM issued and
outstanding immediately prior to the Acquisition Effective Time shall be
converted into and become the number of shares of Class A Common Stock, par
value $.01 per share, of Company Sub and Class L Common Stock, par value $.01
per share, of the Company Sub as are set forth on a schedule to be attached to
the Merger Agreement prior to the Effective Time.
Immediately prior to the Effective Time, all then outstanding but
theretofore unvested and non-exercisable stock options granted under the 1996
Plan (the "Plan Options") and granted under certain arrangements outside the
1996 Plan (the "Non-Plan Options") will become immediately vested and
exercisable in full (unless the Company is otherwise notified to the contrary in
writing by the holder of such Plan Options or Non-Plan Options). At the
Effective Time, the Plan Options and Non-Plan Options shall be converted into
options to acquire shares of common stock of the Surviving Corporation unless a
holder thereof agrees in writing to receive cash equal to the difference between
the exercise price of such options and the Merger Consideration (net of
withholding taxes).
Because the approval of the Company's shareholders is required by
applicable law in order to consummate the Reorganization Merger, the Company
will submit the Reorganization Merger to its shareholders for approval.
The obligations of the parties to the Merger Agreement to effect the
Mergers are subject to certain conditions, and prior to the Effective Time, the
Company, Company Sub or VMM may
Page 9 of 15 Pages
terminate the Merger Agreement under certain circumstances, in each case as set
forth in the Merger Agreement.
The Certificate of Incorporation of the Surviving Corporation will be in
the form set forth as Exhibit D to the Merger Agreement and, subject to the
terms of the Merger Agreement, the bylaws of VMM as in effect at the Acquisition
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Effective Time shall be the bylaws of the Surviving Corporation.
As a result of the Mergers, the entire equity interest in the Surviving
Corporation will be owned by investment funds associated with Bain Capital,
certain management members and certain other investors (collectively, the
"Investors"). The shareholders of the Company (other than the Rollover
Shareholders) will no longer have any interest in, and will not be shareholders
of the Company. Instead, each such holder of the Common Stock will have the
right to receive $15.00 in cash, without interest, for each share held (other
than the Rollover Shares and the Dissenting Shares (as defined in the Merger
Agreement), if any). Following the Mergers, the Investors will have the
opportunity to benefit from any earnings and growth of the Company, and will
bear the risk of any decrease in the Company's value. Following the Mergers,
the Common Stock will no longer be traded on the Nasdaq National Market, price
quotations will no longer be available and the registration of the Common Stock
under the Exchange Act, will be terminated. After such registration is
terminated, the Surviving Corporation will no longer be required to file
periodic reports with the Commission.
Concurrently with the execution and delivery of the Merger Agreement, VMM
and the Shareholders entered into the Shareholders Agreement. Pursuant to the
Shareholders Agreement, the Shareholders have agreed to vote, and have granted
VMM an irrevocable proxy to vote, their shares of Common Stock owned as of
December 24, 1999 and any shares of Common Stock acquired after December 24,
1999 and prior to the Effective Time (the "Subject Shares"): (i) in favor of the
Mergers, the Merger Agreement and all other Transactions (as defined in the
Merger Agreement), (ii) against any action or agreement that such shareholder is
advised by the Board of Directors of the Company in the applicable proxy
materials would result in a breach of any covenant, representation or warranty
or any other obligation or agreement of the Company under the Merger Agreement
and (iii) against any Competing Transaction (as defined in the Merger Agreement)
and any action in furtherance of a Competing Transaction, in each case during
the term of the Shareholders Agreement. Under the Shareholders Agreement, the
Shareholders have retained the right to vote their Subject Shares for the
election of directors of the Company and for or against any other matter other
than as to those specified in the preceding sentence.
The Shareholders Agreement also provides, except as contemplated by the
Shareholders Agreement, that the Shareholders shall not, during the term of the
Shareholders Agreement: (1) sell, transfer, assign, gift, pledge, hypothecate,
encumber or dispose of any or all of such Subject Shares; (ii) grant any proxies
or enter into any voting trust or other agreement or arrangement with respect to
the voting of the Subject Shares except as contemplated by the Shareholders
Agreement or as not otherwise inconsistent therewith; or (iii) enter into any
contract, option or other agreement or understanding with respect to, or consent
to, the sale, transfer, assignment, gift, pledge, hypothecation, encumbrance or
other disposition of any or all of such Shareholder's Subject Shares or any
interest therein; provided, however, that a Shareholder may sell, transfer,
assign, gift, pledge, hypothecate, encumbrance or otherwise dispose of all or a
portion of such Shareholder's Subject Shares to a person or entity who (x) is
either another Shareholder, a member of the Family Group of such Shareholder or
who is otherwise approved by VMM (such approval not to be unreasonably withheld
or delayed) and (y) agrees to be bound, by a written instrument reasonably
acceptable in form and substance to VMM (whose approval shall not be
unreasonably withheld or delayed), by each of the terms of the Shareholders
Agreement. As used in the Shareholders Agreement, "Family Group" means, with
respect to any Shareholder, (A) such Shareholder, (B) the spouse and issue
(whether natural
Page 10 of 15 Pages
or adopted) of such Shareholder, (C) the parents or step-parents of such
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Shareholder (whether natural or adopted), (D) the siblings of such Shareholder
(whether natural or adopted), (E) in the event such Shareholder is deceased, the
heirs or descendants of such Shareholder and (F) any one or more trusts or other
entities for the benefit of any one or more of the persons described in clause
(A) through clause (E) above. Subject to the terms and conditions of the
Shareholders Agreement, the Shareholders have also agreed, among other things,
to waive any appraisal rights they may be entitled to with respect to the
Mergers, to refrain from soliciting any other Competing Transactions, and to
take or refrain from taking certain other actions set forth in the Shareholders
Agreement.
The Shareholders Agreement and all rights and obligations of the parties
thereunder terminates immediately upon the earlier of: (a) the date upon which
the Merger Agreement is terminated in accordance with its terms or (b) the
Effective Time.
The preceding summaries of certain provisions of the Shareholders Agreement
and the Merger Agreement are not intended to be complete and are qualified in
their entirety by reference to the full text of such agreements, copies of which
are incorporated by reference as Exhibits I and II hereto and are incorporated
herein by reference.
Other than as described in this Statement, none of the Reporting Persons or
the persons identified on Schedule A attached hereto presently has any plans or
proposals that relate to or would result in any of the actions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Prior to December 24, 1999, none of the Reporting Persons owned or was the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange Act)
of any shares of Common Stock. Upon execution of the Shareholders Agreement,
VMM may be deemed to have acquired "beneficial ownership" (as defined in Rule
13d-3 promulgated under the Exchange Act), of the Subject Shares, with the sole
power to vote the Subject Shares with respect to the matters set forth in the
Shareholders Agreement. As of December 24, 1999, the Subject Shares totaled
5,376,400 (including 55,000 shares of Common Stock deemed to be beneficially
owned by Mr. Stefanko as a result of his ownership of currently exercisable
options to purchase Common Stock) and constituted approximately 58% of the
issued and outstanding shares of Common Stock (based on the number of shares of
Common Stock represented to be issued and outstanding as of December 22, 1999,
by the Company in the Merger Agreement).
Bain Capital Fund VI, L.P. BCF VI owns all of the issued and outstanding
shares of capital stock of VMM. By virtue of this ownership, BCF VI may be
deemed to have the shared power to vote the Subject Shares with respect to the
matters set forth in the Shareholders Agreement.
Bain Capital Partners VI, L.P. BCP VI, as the sole general partner of BCF
VI, may be deemed to have the shared power to vote the Subject Shares with
respect to the matters set forth in the Shareholders Agreement.
Bain Capital Investors VI, Inc. BCI VI Inc., as the sole general partner
of BCP VI, may be deemed to have the shared power to vote the Subject Shares
with respect to the matters set forth in the Shareholders Agreement.
W. Mitt Romney. Mr. Romney, as the sole stockholder of BCI VI Inc., may be
deemed to have the shared power to vote the Subject Shares with respect to the
matters set forth in the Shareholders Agreement.
Page 11 of 15 Pages
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Neither the filing of this Statement nor any of its contents shall be
deemed to constitute an admission that any Reporting Person is the beneficial
owner of any Common Stock referred to in this Statement for the purposes of
Section 13(d) of the Act or for any other purpose, and such beneficial ownership
is expressly disclaimed.
Item 6. Contracts, Arrangements, Understandings of Relationships With
Respect to Securities of the Issuer.
Except as otherwise set forth in this Statement (and the agreements
referenced herein), to the best knowledge of the Reporting Persons, no
contracts, arrangements, understandings or relationships (legal or otherwise)
exist among the persons named in Item 2 or between such persons and any other
person with respect to any securities of the Company, including but not limited
to transfer or voting of any of the securities of the Company, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees or
profits, divisions of profits or loss, or the giving or withholding of proxies,
or a pledge or contingency, the occurrence of which would give another person
voting power over the securities of the Company.
Item 7. Material to be filed as Exhibits.
Exhibit A -- Shareholders Agreement, dated as of December 24, 1999, by and
among VMM Merger Corp., R. Luke Stefanko and Julia Stefanko.
Exhibit B -- Agreement and Plan of Merger, dated as of December 24, 1999,
by and among VDI MultiMedia, VDI MultiMedia, Inc. and VMM
Merger Corp.
Exhibit C -- Joint Filing Agreement, dated January 3, 2000, between VMM
Merger Corp., Bain Capital Fund VI, L.P., Bain Capital
Partners VI, L.P., Bain Capital Investors VI, Inc. and W. Mitt
Romney.
Page 12 of 15 Pages
SIGNATURES
----------
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certify that the information set
forth in this Statement is true, complete and correct.
Date: January 3, 2000 VMM MERGER CORP.
By: /s/ Joseph Pretlow
_________________________________
Its: Vice President
Date: January 3, 2000 BAIN CAPITAL FUND VI, L.P.
By: Bain Capital Partners VI, L.P.,
its General Partner
By: Bain Capital Investors VI, Inc.,
its General Partner
By: /s/ Joseph Pretlow
_________________________________
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Its: Managing Director
Date: January 3, 2000 BAIN CAPITAL PARTNERS VI, L.P.
By: Bain Capital Investors VI, Inc.,
its General Partner
By: /s/ Joseph Pretlow
_________________________________
Its: Managing Director
Date: January 3, 2000 BAIN CAPITAL INVESTORS VI, INC.
By: Joseph Pretlow
_________________________________
Its: Managing Director
/s/ W. Mitt Romney
______________________________________
Date: January 3, 2000 W. Mitt Romney
Page 13 of 15 Pages
SCHEDULE A
Joseph Pretlow is a director and Vice President of VMM. Prescott Ashe is a
director, Vice President and Secretary of VMM. Blair Ford is a Vice President
and Assistant Secretary of VMM. All are citizens of the United States. Mr.
Pretlow is a Managing Director of Bain Capital, Inc. ("Bain Capital"), which,
through affiliated investment funds, is principally engaged in the business of
investing in securities. The business address of Mr. Pretlow is c/o Bain
Capital, Inc., Two Copely Place, Boston, Massachusetts 02116. Mr. Ashe is a
Principal at Bain Capital and Mr. Ford is an Associate at Bain Capital. The
business address for Mr. Ashe and Mr. Ford is c/o Bain Capital II, Inc., One
Embarcadero, Suite 2260, San Francisco, California 94111.
Bain Capital Partners VI, L.P. ("BCP VI") is the sole general partner
of Bain Capital Fund VI, L.P. ("BCF VI"). Bain Capital Investors VI, Inc. ("BCI
VI Inc.") is the sole general partner of BCP VI. W. Mitt Romney ("Mr. Romney")
is the sole stockholder, sole director, Chief Executive Officer, Managing
Director and President of BCI VI Inc. In addition, the following persons serve
as executive officers for BCI VI Inc.: Joshua Bekenstein (Treasurer and
Managing Director), Edward Conard (Managing Director), John P. Connaughton
(Managing Director), David Dominik (Managing Director), Paul B. Edgerley
(Managing Director), Robert C. Gay (Vice Chairman and Managing Director),
Michael A. Krupka (Managing Director), Jonathan A. Lavine (Managing Director),
Ronald P. Mika (Managing Director), Mark E. Nunnelly (Managing Director),
Stephen G. Pagliuca (Secretary and Managing Director) , Dwight Polar (Managing
Director), Joseph Pretlow (Managing Director) and Mr. Robert F. White (Managing
Director). Each director and/or executive officer of BCI VI, Inc. currently
serves as a Managing Director of Bain Capital. Certain of the Managing
Directors of BCI VI, Inc. hold similar positions at other investment funds
associated with Bain Capital. Each director and/or executive officer of BCI VI,
Inc. is a citizen of the United States. Except as otherwise noted, the business
address for each of the persons named above is c/o Bain Capital, Inc., Two
Copley Place, Boston, Massachusetts 02116. The business address for David
Dominik is c/o Bain Capital II, Inc., One Embarcadero, Suite 2260, San
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Francisco, California 94111.
Page 14 of 15 Pages
EXHIBIT INDEX
Exhibit No. Exhibit Name
- ------------ --------------------------------------------------------------
A Shareholders Agreement, dated as of December 24, 1999, by and
among VMM Merger Corp., R. Luke Stefanko and Julia Stefanko.
B Agreement and Plan of Merger, dated as of December 24, 1999,
by and among VDI MultiMedia, VDI MultiMedia, Inc. and VMM
Merger Corp.
C Joint Filing Agreement, dated January 3, 2000, between VMM
Merger Corp., Bain Capital Fund VI, L.P., Bain Capital
Partners, VI, L.P., Bain Capital Investors VI, Inc. and W.
Mitt Romney.
Page 15 of 15 Pages
EX-99.(A)
2
SHAREHOLDER AGREEMENT
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of December 24, 1999,
between VMM Merger Corp., a Delaware corporation (the "Merger Sub") and the
Shareholders named on Exhibit A hereto (each a "Shareholder").
WHEREAS, each Shareholder is, as of the date hereof, the record and
beneficial owner of the number of shares of common stock, no par value (the
"Common Stock"), of VDI MultiMedia, a California corporation (the "Company"),
set forth next to such Shareholder's name on Exhibit A attached hereto; and
WHEREAS, Merger Sub, the Company and VDI MultiMedia, Inc., a Delaware
corporation ("Company Sub"), concurrently herewith are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"; capitalized terms used herein without definition shall have the
respective meanings set forth in the Merger Agreement), which provides, among
other things, for the acquisition of the Company by Bain and certain other
investors by means of a merger of the Company with and into Company Sub followed
by the merger of Merger Sub with and into Company Sub, each upon the terms and
subject to the conditions set forth in the Merger Agreement (the "Mergers"); and
WHEREAS, as a condition to the willingness of Merger Sub to enter into the
Merger Agreement, and in order to induce Merger Sub to enter into the Merger
Agreement, each Shareholder has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Merger
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Sub of the Merger Agreement and the foregoing and the mutual representations,
warranties, covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of the Shareholders. Each
--------------------------------------------------
Shareholder hereby severally represents and warrants, as to such Shareholder, to
Merger Sub as follows:
a. Except as described on Schedule I hereto, such Shareholder is the
record and beneficial owner of the shares of Common Stock ("Shares") set forth
next to such Shareholder's name on Exhibit A attached hereto and such Shares
constitute all of the shares of capital stock of the Company owned by such
Shareholder as of the date hereof.
b. This Agreement has been duly authorized, executed and delivered by
such Shareholder and constitutes the legal, valid and binding obligation of such
Shareholder, enforceable against such Shareholder in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to creditors' rights generally and to
general principles of equity.
c. Neither the execution and delivery of this Agreement nor the
consummation by such Shareholder of the transactions contemplated hereby will
result in a violation of, or a default (or an event that with notice or lapse of
time or both would become a default) under, or conflict with, any contract,
trust, commitment, agreement, understanding or arrangement of any kind to which
the Shareholder is a party or bound or to which such Shareholder's Shares are
subject or result in the creation of any Lien (as defined below) on any of such
Shareholder's Shares. Consummation by such Shareholder of the transactions
contemplated hereby will not violate, or require any consent, approval, or
notice under any provision of any judgment, order, decree, writ, injunction,
statute, law, rule or regulation applicable to such Shareholder or such
Shareholder's Shares, except for any necessary filing under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act").
d. Except as described on Schedule I attached hereto, such Shareholder's
Shares and the certificates representing such Shareholder's Shares are now and
at all times during the term hereof will be held by such Shareholder, or by a
nominee or custodian for the benefit of such Shareholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever
(collectively, "Liens"), except for any such encumbrances or proxies arising
hereunder or otherwise disclosed to Merger Sub; provided, however, that such
Shareholder may transfer all or a portion of the Shares in accordance with
Section 3 of this Agreement.
SECTION 2. Representations and Warranties of Merger Sub. Merger Sub
--------------------------------------------
hereby represents and warrants to each Shareholder as follows:
a. Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
b. This Agreement has been duly authorized, executed and delivered by
Merger Sub and constitutes the legal, valid and binding obligation of it,
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enforceable against Merger Sub in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to creditors' rights generally and to general principles
of equity.
c. Neither the execution and delivery of this Agreement nor the
consummation by Merger Sub of the transactions contemplated hereby will result
in a violation of, or a default (or an event that with notice or lapse of time
or both would became a default) under, or conflict with, any contract, trust,
commitment, agreement, understanding or arrangement of any kind to which Merger
Sub is a party or bound. The consummation by Merger Sub of the transactions
contemplated hereby will not violate, or require any consent, approval, or
notice under any provision of any judgment, order, decree, writ, injunction,
statute, law, rule or regulation applicable to Merger Sub, except for any
necessary filing under the HSR Act.
2
SECTION 3. Transfer of the Shares.
----------------------
a. Prior to the termination of this Agreement, except as otherwise
provided herein or as described on Schedule I attached hereto, each Shareholder
agrees that it shall not: (i) sell, transfer, assign, gift, pledge,
hypothecate, encumber or dispose of any or all of such Shareholder's Shares and
any shares subsequently acquired after the date hereof (the "Subject Shares");
(ii) grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of the Subject Shares except as
contemplated hereby or as not otherwise inconsistent herewith; or (iii) enter
into any contract, option or other agreement or understanding with respect to,
or consent to, the sale, transfer, assignment, gift, pledge, hypothecation,
encumbrance or other disposition of any or all of such Shareholder's Subject
Shares or any interest therein; provided, however, that a Shareholder may sell,
transfer, assign, gift, pledge, hypothecate, encumber or otherwise dispose of
all or a portion of such Shareholder's Subject Shares to a person or entity who
(x) is either another Shareholder, a member of the Family Group of such
Shareholder or who is otherwise approved by Merger Sub (such approval not to be
unreasonably withheld or delayed) and (y) agrees to be bound, by a written
instrument reasonably acceptable in form and substance to Merger Sub (whose
approval shall not be unreasonably withheld or delayed), by each of the terms of
this Agreement.
b. As used herein, "Family Group" means, with respect to any Shareholder,
(A) such Shareholder, (B) the spouse and issue (whether natural or adopted) of
such Shareholder, (C) the parents or step-parents of such Shareholder (whether
natural or adopted), (D) the siblings of such Shareholder (whether natural or
adopted), (E) in the event such Shareholder is deceased, the heirs or
descendants of such Shareholder and (F) any one or more trusts or other entities
for the benefit of any one or more of the persons described in clause (A)
through clause (E) above.
c. In addition, notwithstanding anything to the contrary contained
herein, if any term or provision of this Agreement triggers, or is deemed to
trigger, the application of the last paragraph of Section 1101 of the California
Corporations Code, (x) "Subject Shares" shall mean that number of shares of
Common Stock, together with all shares of Common Stock covered by agreements
similar hereto, which aggregate 49% of the then issued and outstanding Shares of
Common Stock and (y) each Shareholder's "Subject Shares" shall mean that number
of shares of Common Stock equal to the aggregate number of Subject Shares as
determined by item (x) above multiplied by a fraction, the numerator of which is
equal to such Shareholder's Subject Shares and the denominator of which is equal
to the aggregate Subject Shares of all Shareholders party hereto.
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SECTION 4. Voting of Shares.
----------------
a. Each Shareholder hereby agrees that, during the term of this
Agreement, at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of the holders of Common Stock, however called,
or in connection with any written consent of the holders of Common Stock
solicited by the Board of Directors, such Shareholder will appear at the meeting
or otherwise cause its Subject Shares to be counted as present thereat for
purposes of
3
establishing a quorum and vote or consent (or cause to be voted or consented)
such Shareholder's Subject Shares (i) in favor of the Mergers, the Merger
Agreement and all other Transactions, (ii) against any action or agreement that
such Shareholder is advised by the Board of Directors of the Company in the
applicable proxy materials would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement, and (iii) against any Competing Transaction and any
action in furtherance of a Competing Transaction, in each case during the term
of this Agreement.
b. Merger Sub agrees that each Shareholder shall retain the right to vote
such Shareholder's Subject Shares for the election of directors of the Company
and for or against any other matter other than as to those specified in clause
(a) of this Section 4.
SECTION 5. Irrevocable Proxy. Each Shareholder hereby grants an
-----------------
irrevocable proxy during the term of this Agreement to, and hereby constitutes
and appoints, Merger Sub as such Shareholder's attorney-in-fact and proxy, with
full power of substitution, for and in such Shareholder's name, to vote (by
written consent or otherwise) the Subject Shares, which such holder is entitled
to vote at any meeting of Shareholders of the Company (whether annual or special
and whether or not an adjourned or postponed meeting) on the matters and in the
manner specified in Section 4 above. THIS PROXY IS IRREVOCABLE AND COUPLED WITH
AN INTEREST. Each Shareholder hereby revokes all previous proxies granted with
respect to the Subject Shares that such Shareholder may have heretofore
appointed or granted that are inconsistent herewith, and no subsequent proxy
shall be given (and if given or executed, shall not be effective) by such
Shareholder with respect thereto. All authority herein conferred or agreed to
be conferred shall survive the death or incapacity of such Shareholder.
SECTION 6. Competing Transactions. Each Shareholder will not, and will
----------------------
instruct its officers, directors, employees, investment banker, attorney,
financial advisor or other representatives or agents (the "Representatives")
during the term of the Agreement not to, initiate, solicit or encourage
(including by way of furnishing information or assistance) any Competing
Transaction, or enter into or maintain discussions or negotiate with any person
or entity in furtherance of or relating to or to obtain a Competing Transaction,
or agree to or endorse any Competing Transaction, or authorize or permit any
Representative to take any such action, and such Shareholder shall use its
reasonable best efforts to cause its Representatives not to take any such
action.
SECTION 7. Appraisal Rights. Each Shareholder agrees not to exercise any
----------------
rights (including without limitation, under Chapter 13 of the California General
Corporation Law) to demand appraisal of any Subject Shares which may arise with
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respect to the Mergers.
SECTION 8. Stock Legend. At the request of Merger Sub, each Shareholder
------------
agrees to allow to be stamped, printed or typed on the face of his or her
certificates evidencing the Subject Shares, the following legend:
"THE VOTING, SALE, ASSIGNMENT, TRANSFER,
GIFT, PLEDGE, HYPOTHECATION, ENCUMBRANCE OR
4
DISPOSITION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO A SHAREHOLDERS
AGREEMENT DATED AS OF DECEMBER 24, 1999 BY
AND BETWEEN VMM MERGER CORP. AND THE RECORD
OWNER HEREOF, COPIES OF WHICH ARE ON FILE AT
THE OFFICES OF VDI MULTIMEDIA."
SECTION 9. Further Assurances; Shareholder Capacity.
----------------------------------------
a. Each Shareholder shall, upon request of Merger Sub, execute and
deliver any additional documents and take such further actions as may reasonably
be deemed by Merger Sub to be necessary or desirable to carry out the provisions
hereof and to vest the power to vote the Shares as contemplated by Section 5
hereof in Merger Sub.
b. Nothing in this Agreement shall be construed to prohibit any
Shareholder or any affiliate of any Shareholder who is or becomes or has
designated a member of the Board of Directors of the Company from taking any
action solely in his or her capacity as a member of the Board of Directors of
the Company or from exercising his or her fiduciary duties as a member of such
Board of Directors.
c. Each Shareholder hereby consents to the entry into this Agreement by
any other Shareholder with respect to all interests of such Shareholders.
SECTION 10. Termination. This Agreement and all rights and obligations of
-----------
the parties hereunder shall terminate immediately upon the earlier of (the
"Termination Date"): (a) the date upon which the Merger Agreement is terminated
in accordance with its terms or (b) the Effective Time. The provisions set forth
in Section 10 shall survive any termination of this Agreement.
SECTION 11. Expenses. Except as provided in Section 11.1 of the Merger
--------
Agreement, all fees and expenses incurred by any one party hereto shall be borne
by the party incurring such fees and expenses.
SECTION 12. Public Announcements. Merger Sub and each Shareholder agrees
--------------------
that it will not issue any press release or otherwise make any public statement
with respect to this Agreement or the transactions contemplated hereby without
the prior consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided, however, that such disclosure can be made without
obtaining such prior consent if (i) the disclosure is required by law or
regulation or by obligations imposed pursuant to any listing agreement with the
NASDAQ National Market and (ii) the party making such disclosure has first used
its reasonable best efforts to consult with the other party about the form and
substance of such disclosure.
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5
SECTION 13. Miscellaneous.
-------------
a. Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in the Merger
Agreement.
b. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed given (and shall be deemed to
have been duly received if so given) by delivery in person, by facsimile
transmission , by registered or certified mail (postage prepaid, return receipt
requested) or courier service providing proof of delivery to the respective
parties, addressed at the following addresses (or at such other address for a
party as shall be specified in a notice in accordance with this Section 13(b)):
i. If to the Merger Sub, to the address set forth on Exhibit B:
ii. If to any Shareholder, to the address set forth next to such
Shareholder's name on Exhibit A hereto.
c. The Section captions herein are for convenience of reference only and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
d. This Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement.
e. This Agreement (including the Merger Agreement and any other documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties, with respect to the subject matter hereof.
f. This Agreement shall be governed by, and construed in accordance with
the laws of the State of California without giving effect to the principles of
conflicts of laws thereof.
g. Except as provided in Section 3 hereof, neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assignable by
operation of law or otherwise without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by, the parties and their
respective successors and assigns. This Agreement is not intended to be for the
benefit of, and shall not be enforceable by, any person or entity not a party
hereto.
h. If any term, provision, covenant or restriction herein is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
6
i. Each of the parties hereto acknowledges and agrees that in the event
of any breach or failure of performance of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto shall be
entitled to injunctive relief and to compel specific performance of this
Agreement in addition to any other remedy to which they are entitled to at law
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or in equity.
j. No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
IN WITNESS WHEREOF, Merger Sub and each Shareholder has executed and
delivered or caused this Agreement to be duly executed and delivered as of the
date first written above.
VMM MERGER CORP.
By: /s/ Joseph Pretlow
____________________________
Name: Joseph Pretlow
Title: Vice President
/s/ R. Luke Stefanko
____________________________
R. Luke Stefanko
/s/ R. Julia Stefanko
____________________________
R. Julia Stefanko
7
EXHIBIT A
Ownership of Outstanding
------------------------
Shares of Common Stock
----------------------
Name Record Ownership Beneficial Ownership
R. Luke Stefanko 100% 58.34%
Address for Notice:
c/o Daniel Jaffe, Esq.
Jaffe & Clemens
433 North Camden Drive
Suite 1000
Beverly Hills, CA 90210
Julia Stefanko -- 41.66%
Address for Notice:
c/o Harvey Sitzer, Esq.
Law Offices of Harvey Sitzer
1888 Century Park East
Suite 1700
Los Angeles, CA 90067
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A-1
EXHIBIT B
To the Merger Sub:
c/o Bain Capital, Inc.
Two Copley Place
Boston, MA 02116
Facsimile: (617) 572-3274
Attention: Joseph Pretlow
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Facsimile: (312) 861-2200
Attention: Jeffrey C. Hammes, P.C.
Gary M. Holihan
B-1
EX-99.(B)
3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
by and among
VDI MultiMedia,
VDI MultiMedia, Inc.,
and
VMM Merger Corp.
Dated as of December 24, 1999
_____________________________________________________________________________
TABLE OF CONTENTS
Page
----
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ARTICLE I THE REORGANIZATION
MERGER................................................. 2
Section 1.1 The Reorganization
Merger................................................. 2
Section 1.2 Reorganization
Closing.................................................... 2
Section 1.3 Reorganization Effective
Time............................................. 2
Section 1.4 Subsequent
Actions........................................................ 3
Section 1.5 Certificate of
Incorporation.............................................. 3
Section 1.6 The
Bylaws................................................................ 3
Section 1.7 Officers and
Directors.................................................... 3
Section 1.8 Employee Benefit
Plans.................................................... 3
ARTICLE II CONVERSION OR CANCELLATION OF SHARESIN THE REORGANIZATION
MERGER.......... 4
Section 2.1 Conversion or Cancellation of
Shares...................................... 4
Section 2.2 Transfer of Company Shares After the Reorganization Effective
Time........ 5
Section 2.3 Treatment of
Options...................................................... 5
ARTICLE III THE ACQUISITION
MERGER.................................................... 5
Section 3.1 The Acquisition
Merger.................................................... 5
Section 3.2 Acquisition
Closing....................................................... 5
Section 3.3 Acquisition Effective
Time................................................ 6
Section 3.4 Subsequent
Actions........................................................ 6
Section 3.5 Certificate of
Incorporation.............................................. 6
Section 3.6 The
Bylaws................................................................ 6
Section 3.7 Officers and
Directors.................................................... 6
ARTICLE IV CONVERSION OR CANCELLATION OF SHARES IN THE ACQUISITION
MERGER............ 7
Section 4.1 Conversion or Cancellation of
Shares...................................... 7
Section 4.2 Payment for Company Sub Shares and Stock Options in the
Acquisition
Merger........................................................ 7
Section 4.3 Transfer of Company Sub Shares After the Acquisition Effective
Time....... 9
Section 4.4 No
Liability.............................................................. 9
Section 4.5 Lost
Certificates......................................................... 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE
COMPANY............................. 9
Section 5.1 Organization and Qualification;
Subsidiaries.............................. 10
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Section 5.2 Charter Documents and
Bylaws.............................................. 10
Section 5.3
Capitalization............................................................ 11
Section 5.4 Authority Relative to this
Agreement...................................... 12
Section 5.5 No Conflict; Required Filings and
Consents................................ 12
i
Section 5.6 SEC Filings; Financial
Statements......................................... 13
Section 5.7 Absence of Certain Changes or
Events...................................... 15
Section 5.8 Intellectual
Property..................................................... 16
Section 5.9 Material
Contracts........................................................ 17
Section 5.10 Environmental
Matters..................................................... 19
Section 5.11 Benefit
Plans............................................................. 19
Section 5.12 Tax
Matters............................................................... 21
Section 5.13
Litigation................................................................ 22
Section 5.14 Opinion of Financial
Advisor.............................................. 23
Section 5.15
Brokers................................................................... 23
Section 5.16 Properties and
Assets..................................................... 23
Section 5.17 Compliance with Laws in
General........................................... 24
Section 5.18 Labor
Matters............................................................. 24
Section 5.19
Insurance................................................................. 24
Section 5.20 Customers and
Suppliers................................................... 25
Section 5.21 Company
Expenses.......................................................... 25
Section 5.22 Required Company
Vote..................................................... 25
Section 5.23 State Takeover
Laws....................................................... 26
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF MERGER
SUB.............................. 26
Section 6.1 Organization and Qualification;
Subsidiaries.............................. 26
Section 6.2 Certificate of Incorporation and
Bylaws................................... 26
Section 6.3 Authority Relative to this
Agreement...................................... 26
Section 6.4 No Conflict; Required Filings and
Consents................................ 27
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Section 6.5 Ownership of Merger Sub; No Prior
Activities.............................. 28
Section 6.6
Litigation................................................................ 28
Section 6.7
Financing................................................................. 28
Section 6.8
Brokers................................................................... 28
ARTICLE VII
COVENANTS................................................................. 28
Section 7.1 Interim Operations of the
Company......................................... 28
ARTICLE VIII ADDITIONAL
AGREEMENTS..................................................... 31
Section 8.1 Meeting of the
Shareholders............................................... 31
Section 8.2 Filings; Other
Action..................................................... 32
Section 8.3
Access.................................................................... 33
Section 8.4 Notification of Certain
Matters........................................... 33
Section 8.5
Publicity................................................................. 33
Section 8.6
Indemnification........................................................... 34
Section 8.7 Obligations of Merger
Sub................................................. 35
Section 8.8 Stock
Options............................................................. 35
Section 8.9 Employee Benefit
Plans.................................................... 37
Section 8.10 No Solicitation of
Transactions........................................... 37
Section 8.11 Third Party Standstill
Agreements......................................... 39
ii
Section 8.12
Consents.................................................................. 39
Section 8.13 SEC
Reports............................................................... 39
Section 8.14
Delisting................................................................. 39
Section 8.15 Actions Respecting Commitment Letters; Financing,Notification............ 39
Section 8.16 Financial
Statements...................................................... 40
Section 8.17 Shareholders
Agreement.................................................... 40
Section 8.18 State Takeover
Laws....................................................... 41
ARTICLE IX
CONDITIONS................................................................ 41
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Section 9.1 Conditions to the Obligations of Each
Party............................... 41
Section 9.2 Additional Conditions to the Acquisition
Merger........................... 41
Section 9.3 Conditions to the Obligations of Merger
Sub............................... 41
Section 9.4 Conditions to the Obligations of the Company and Company
Sub.............. 43
ARTICLE X
TERMINATION............................................................... 44
Section 10.1 Termination by Mutual
Consent............................................. 44
Section 10.2 Termination by Either Merger Sub or the
Company........................... 44
Section 10.3 Termination by Merger
Sub................................................. 44
Section 10.4 Termination by the
Company................................................ 45
Section 10.5 Effect of Termination and
Abandonment..................................... 46
ARTICLE XI MISCELLANEOUS;
GENERAL.................................................... 46
Section 11.1 Payment of
Expenses....................................................... 46
Section 11.2
Survival.................................................................. 47
Section 11.3 Modification or
Amendment................................................. 48
Section 11.4
Counterparts.............................................................. 48
Section 11.5 Governing
Law............................................................. 48
Section 11.6
Notices................................................................... 48
Section 11.7 Entire Agreement,
etc..................................................... 49
Section 11.8
Captions.................................................................. 49
Section 11.9 Certain
Definitions....................................................... 49
Section 11.10 No Third Party
Beneficiaries.............................................. 49
Section 11.11 Company Disclosure
Schedule............................................... 49
iii
GLOSSARY OF DEFINED TERMS
Defined Term Position of Definition
- ------------ ----------------------
Acquisition Agreement of Merger (S)3.1
Acquisition Closing (S)3.2
Acquisition Constituent Corporations Preamble
Acquisition Effective Time (S)3.3
Acquisition Merger Recitals
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affiliate (S)4.1(a)
Agreement Preamble
Bain Recitals
Bain Commitment Letter Recitals
Benefit Plans (S)5.11(c)
Certificates (S)4.2(b)
Claim (S)8.6(b)
Class A Common (S)4.1(c)
Class L Common (S)4.1(c)
Closing (S)3.2
Code (S)5.11(c)
Commitment Letters (S)6.7
Common Stock Recitals
Company Preamble
Company Disclosure Schedule Article V Preamble
Company Material Adverse Effect (S)5.1
Company Representatives (S)8.10(a)
Company Sub Preamble
Company Sub Common Stock (S)2.1(a)
Company Sub Shares (S)4.1(a)
Company Subsidiary (S)5.1
Competing Transaction (S)8.10(b)
Computer Systems (S)5.8(b)
Confidentiality Agreement (S)8.3
Conversion Schedule (S)4.1(c)
CGCL (S)1.3
COBRA (S)5.11(f)
DGCL (S)1.1
Debt Commitment Letters (S)6.7
Dissenting Shareholder (S)2.1(c)
Dissenting Shares (S)2.1(c)
Effective Time (S)3.3
Environmental Laws (S)5.10
ERISA (S)5.11(b)
Exchange Act (S)5.5(b)
iv
Exchange Fund (S)4.2(a)
Expenses (S)11.1(a)
Financing (S)8.16
Governmental Authority (S)5.5(b)
HSR Act (S)5.5(b)
Indemnified Parties (S)8.6(b)
Intellectual Property (S)5.8(a)
Law (S)5.5(a)
Liens (S)5.5(a)
Material Contracts (S)5.9(b)
Mergers Recitals
Merger Consideration (S)4.1(a)
Merger Sub Preamble
Merger Sub Companies (S)4.1(a)
Merger Sub Material Adverse Effect (S)6.1
Multiemployer Pension Plans (S)5.11(b)
NASDAQ/NMS (S)5.5(b)
Non-Plan Options (S)8.8
Option Consideration (S)8.8(c)
Options (S)5.3(a)
Option Plans (S)5.3(a)
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Paying Agent (S)4.2(a)
Payment Fund (S)4.2(a)
Pension Plans (S)5.11(b)
Plan Options (S)8.8(c)
Plans (S)5.3
Proxy Statement (S)8.1(b)
Reorganization Agreement of Merger (S)1.1
Reorganization Closing (S)1.2
Reorganization Constituent Corporations Preamble
Reorganization Effective Time (S)1.3
Reorganization Merger Recitals
Reorganization Surviving Corporation (S)1.1
Representatives (S)8.3
Rollover Shares (S)4.1(a)
Rollover Shareholder Recitals
SEC (S)5.6(a)
SEC Reports (S)5.6(a)
Securities Act (S)5.6(a)
Shares (S)2.1(a)
Shareholders Agreement Recitals
Shareholders Meeting (S)8.1(a)
Substitute Debt Financing (S)8.15(b)
Superior Proposal (S)8.10(c)
v
Surviving Corporation (S)3.1
Terminating Company Breach (S)10.3(a)
Terminating Merger Sub Breach (S)10.4(a)
Transactions Recitals
5% Shareholder (S)5.9(e)
vi
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
as of December 24, 1999, between VDI MultiMedia, a California corporation (the
"Company"), VDI MultiMedia, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("Company Sub"), and VMM Merger Corp., a Delaware
corporation ("Merger Sub"); the Company and Company Sub sometimes being
hereinafter collectively referred to as the "Reorganization Constituent
Corporations" and Company Sub and Merger Sub sometimes being hereinafter
collectively referred to as the "Acquisition Constituent Corporations."
RECITALS
WHEREAS, the Company desires that it merge with and into Company Sub, all
upon the terms and subject to the conditions of this Agreement (the
"Reorganization Merger");
WHEREAS, Company Sub desires that, upon the completion of the
Reorganization Merger, Merger Sub merge with and into Company Sub, all upon the
terms and subject to the conditions of this Agreement (the "Acquisition Merger"
and collectively with the Reorganization Merger, the "Mergers");
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WHEREAS, the Board of Directors of the Company has, in light of and subject
to the terms and conditions set forth herein, (i) determined that (A) the
Mergers are in the best interests of the Company and its shareholders and (B)
the consideration to be paid for each share of common stock in the Acquisition
Merger is fair to the shareholders of the Company and (ii) resolved to approve
and adopt this Agreement and the transactions contemplated hereby (the
"Transactions") and to recommend approval and adoption by the shareholders of
the Company of this Agreement and the Transactions;
WHEREAS, the Company and Merger Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Mergers;
WHEREAS, those shareholders of the Company that are identified on Schedule
I hereto or as may be added thereto from time to time by Merger Sub prior to the
Effective Time (as defined below), subject to the limitations set forth thereon
(each a "Rollover Shareholder" and collectively, the "Rollover Shareholders"),
shall have certain of their shares of common stock, no par value, of the Company
(the "Common Stock") converted into shares of the capital stock of the Surviving
Corporation (as defined below) in connection with the Mergers as more fully
described herein;
WHEREAS, concurrently with the execution of this Agreement, Bain Capital
Fund VI, L.P. ("Bain") has entered into an agreement with Merger Sub for the
benefit of the Company in which it has agreed to cause Merger Sub to perform its
obligations at or prior to the Effective Time (as defined below) hereunder and,
subject to the conditions set forth therein, to invest a
1
specified amount in Merger Sub at or prior to the Effective Time (the "Bain
Commitment Letter"); and
WHEREAS, concurrently with the execution of this Agreement, certain
existing shareholders of the Company have entered into a shareholders agreement
(the "Shareholders Agreement") pursuant to which such shareholders have agreed,
among other things, to vote for the Reorganization Merger and to grant to Merger
Sub a proxy with respect to the voting of their Subject Shares (as defined in
the Shareholders Agreement) under the circumstances set forth in the
Shareholders Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto agree as follows:
ARTICLE I
THE REORGANIZATION MERGER
Section I.1 The Reorganization Merger. Subject to the terms and
conditions of this Agreement and of the Agreement of Merger attached hereto as
Exhibit A (the "Reorganization Agreement of Merger"), at the Reorganization
Effective Time (as defined below), the Company shall be merged with and into
Company Sub and the separate corporate existence of the Company shall thereupon
cease. Company Sub shall be the surviving corporation in the Reorganization
Merger (sometimes hereinafter referred to as the "Reorganization Surviving
Corporation") and shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of Company Sub with all its
rights, privileges, immunities and franchises shall continue unaffected by the
Reorganization Merger. The Reorganization Merger shall have the effects
specified in the Delaware General Corporation Law (the "DGCL").
Section I.2 Reorganization Closing. Subject to the conditions contained
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in this Agreement, the closing of the Reorganization Merger (the "Reorganization
Closing") shall take place (i) at the offices of Kirkland & Ellis, New York, New
York, as promptly as practicable but in no event later than the third business
day after which the last to be fulfilled or waived of the conditions set forth
in Article IX hereof shall be fulfilled or waived in accordance with this
Agreement, at such time as the Company, Company Sub and Merger Sub may agree, or
(ii) at such other place and time and/or on such other date as the Company,
Company Sub and Merger Sub may agree.
Section I.3 Reorganization Effective Time. As soon as practicable
following fulfillment or waiver of the conditions specified in Article IX
hereof, and provided that this Agreement has not been terminated or abandoned
pursuant to Article X hereof, the Company and Company Sub will cause the
Reorganization Agreement of Merger to be executed and filed with the Secretary
of State of the State of Delaware and the Secretary of State of the State of
California, with an officer's certificate of each Reorganization Constituent
Corporation attached, as provided in the DGCL and the California General
Corporate Law (the "CGCL"), as
2
applicable. The Reorganization Merger shall become effective at the time of the
filing of the Reorganization Agreement of Merger with the Secretary of State of
the State of Delaware, and such time is hereinafter referred to as the
"Reorganization Effective Time."
Section I.4 Subsequent Actions. If, at any time after the
Reorganization Effective Time, the Reorganization Surviving Corporation shall
consider or be advised that any deeds, bills of sale, assignments, assurances or
any other actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Reorganization Surviving Corporation its
right, title or interest in, to or under any of the rights, properties or assets
of either of the Reorganization Constituent Corporations acquired or to be
acquired by the Reorganization Surviving Corporation as a result of, or in
connection with, the Reorganization Merger or otherwise to carry out this
Agreement, the officers and directors of the Reorganization Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of each of the Reorganization Constituent Corporations or otherwise, all
such deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf of each of the Reorganization Constituent Corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Reorganization Surviving Corporation or
otherwise to carry out this Agreement.
Section I.5 Certificate of Incorporation. The Certificate of
Incorporation of the Reorganization Surviving Corporation shall be in the form
set fo