On May 18, 1998, ATL Products, Inc. ("ATL") entered into an Agreement
and Plan of Reorganization (the "Merger Agreement") with Quantum
Corporation ("Quantum") providing for, among other things, the merger
(the "Merger") of a wholly-owned subsidiary of Quantum with and into
ATL, with ATL becoming a wholly-owned subsidiary of Quantum. In the
Merger, holders of each share of the Class A Common Stock, par value
$.0001 per share, and the Class B Common Stock, par value $.0001 per
share, of ATL (collectively "ATL Common Stock") will receive shares of
the common stock, par value $.01 per share, of Quantum ("Quantum Common Stock") with a value of $29.00 (measured and subject to
adjustment as described below).
The number of Quantum shares to be issued per share of ATL Common Stock
will equal that number of shares of Quantum Common Stock equal to the
quotient determined by dividing (i) $29.00 by (ii) the Quantum Deemed
Value (as defined below) (the "Exchange Ratio"). "Quantum Deemed Value"
shall mean the average closing price of Quantum Common Stock as reported
on the Nasdaq National
Market System ("Nasdaq") for the period consisting of the 45 trading
days ending on and including the fourth trading day prior to the date of
ATL's stockholders' meeting at which the Merger is approved (such 45-day
period to be referred to hereinafter as the "Pricing Period"); provided,
however, that the Quantum Deemed Value shall be subject to adjustment as
described below. Subject to the provisions below, the Quantum Deemed
Value shall be reduced by an amount equal to 50% of the excess, if any,
of the Interim Price over the Adjusted Base Price where, for purposes of
such calculation, (i) the Interim Price shall be equal to the average
closing price of Quantum Common Stock as reported on Nasdaq for the five
(5) trading days beginning upon the commencement of the Pricing Period
(the "Interim Period") and (ii) the Adjusted Base Price shall be equal
to the average
closing price of Quantum Common Stock as reported on Nasdaq for the five
(5) trading days ending on and including May 18, 1998 (such average
closing price to be referred to hereinafter as the "Unadjusted Base
Price", and such five-day period referred to hereinafter as the "Base
Period") increased by the greater of (v) the percentage by which the
average HDD Index (as defined below) for the Interim Period exceeds the
average of the HDD Index for the Base Period or (w) the percentage by
which the average of the Nasdaq Composite Index for the Interim Period
exceeds the average of the Nasdaq Composite Index for the Base Period;
provided, however, that notwithstanding the foregoing, no adjustment
shall be made to the Quantum Deemed Value (x) if the Adjusted Base Price
is greater than or equal to the Interim Price, (y) if the Unadjusted
Base Price is greater than or equal to the Quantum Deemed Value (as
calculated prior to any adjustment pursuant to this sentence) or (z) to the extent that any adjustment to the Quantum Deemed Value pursuant to
this sentence would cause such Quantum Deemed Value to be lower than the
Unadjusted Base Price. The "HDD Index" for any period shall equal the
sum of the daily closing sale prices per share of Seagate Technology
Inc. and Western Digital Corp.
Consummation of the Merger is subject to certain conditions,
including the approval of the Merger by the stockholders of ATL and the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. |
