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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: John Thomas who wrote (48870)	3/25/2000 9:41:00 AM
From: John Rieman	Read Replies (1) \| Respond to of 50808

Questions about the merger.......................... 10kwizard.com QUESTIONS AND ANSWERS ABOUT THE MERGER Q: WHAT AM I BEING ASKED TO VOTE UPON? A: Harmonic stockholders: You are being asked to approve: - the merger agreement, the issuance of Harmonic common stock in the merger and an amendment to the certificate of incorporation to increase the authorized number of shares to 75 million to allow for the issuance of approximately 26 million shares of Harmonic common stock to the current C-Cube Microsystems stockholders; and - the further amendment of Harmonic's certificate of incorporation to increase the authorized number of shares of Harmonic common stock to 150 million shares. If approved, this further amendment to the certificate of incorporation will take effect only if the merger is completed. C-Cube Microsystems stockholders: You are being asked to approve the merger, which if approved, will necessarily result in the proposed spin-off of the semiconductor business. Q: WHEN WILL THE PROPOSED SPIN-OFF OF THE SEMICONDUCTOR BUSINESS OCCUR? A: If the Harmonic or C-Cube Microsystems stockholders do not vote to approve the merger, or the merger is otherwise abandoned, then the proposed spin-off will not occur. If the Harmonic and C-Cube Microsystems stockholders do vote to approve the merger and the conditions to the merger are satisfied or waived, the record date for the spin-off transaction will be set immediately after the vote for the proposed merger. C-Cube Microsystems will then spin off its semiconductor business approximately seven business days thereafter which will be immediately prior to the closing of the merger. Q: WHAT WILL I RECEIVE IN THE MERGER? A: Harmonic stockholders: You will not receive any consideration in the merger nor will you receive any consideration from the proposed spin-off by C-Cube Microsystems of its semiconductor business. You are receiving the C-Cube Semiconductor prospectus relating to the spin-off for informational purposes only and not investment purposes. C-Cube Microsystems stockholders: You will receive, for each share of C-Cube Microsystems common stock you hold, 0.5427 of a share of Harmonic common stock. Based on a closing sale price of $102 7/8 for a share of Harmonic common stock as of March 20, 2000, 0.5427 of a share of Harmonic common stock would be valued at $55.83. In addition, at the completion of the proposed spin-off transaction, prior to the closing of the merger, you will receive a distribution of shares of the semiconductor business based on the number of shares you hold in C-Cube Microsystems relative to the total number of shares of C-Cube Microsystems that are outstanding. Please see the separate prospectus relating to the spin-off that has been mailed to you along with this joint proxy statement/ prospectus. C-Cube Microsystems option holders: If you do not exercise your vested options prior to the closing of the merger, your vested options will be canceled and you will not receive any Harmonic shares or options for those C-Cube Microsystems options. Generally, each outstanding unvested C-Cube Microsystems option held by either an employee who will continue to be employed by Harmonic after the merger or an employee who will continue to be employed by C-Cube Microsystems' semiconductor business after the proposed spin-off will be adjusted so as to preserve the value of such options. Please see "The Merger -- Interests of Certain Persons in the Merger -- Employee Options" beginning on page 46 for further details on this issue. Q: IF I AM A C-CUBE MICROSYSTEMS STOCKHOLDER, HOW SHOULD I SEND IN MY STOCK CERTIFICATES? A: Do not send your stock certificates with your proxy card. You must keep your stock certificates until after the closing, when you will receive a letter of transmittal describing how you may exchange your certificates for merger consideration. You must send in your 1 C-Cube Microsystems stock certificates with your completed letter of transmittal to the exchange agent. Q: HOW DOES MY BOARD OF DIRECTORS RECOMMEND THAT I VOTE ON THE PROPOSALS? A: Harmonic stockholders: The Harmonic board of directors unanimously recommends that you vote FOR: - the merger agreement, the issuance of Harmonic common stock in the merger and the amendment to the certificate of incorporation to increase the authorized number of shares to 75 million to allow for the issuance of approximately 26 million shares of Harmonic common stock to the current C-Cube Microsystems stockholders; and - the proposed further amendment to Harmonic's certificate of incorporation to increase the authorized number of shares of Harmonic common stock to 150 million shares. C-Cube Microsystems stockholders: The C-Cube Microsystems board of directors unanimously recommends that you vote FOR the proposal to approve the merger, which if approved, will necessarily result in the proposed spin-off of the semiconductor business. Q: WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS? A: Harmonic stockholders: The two proposals to be voted upon by the Harmonic stockholders will require the approval of holders of a majority of the outstanding shares of Harmonic common stock. If you do not vote, your non-votes will have the same effect as votes against approval of the merger. C-Cube Microsystems stockholders: Approval of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of C-Cube Microsystems common stock. If you do not vote, your non-votes will have the same effect as votes against approval of the merger. Q: WHAT DO I NEED TO DO NOW? A: After you read and consider the information in this document, just mail your signed proxy card in the enclosed return envelope as soon as possible, so that your shares may be represented at the appropriate stockholders meeting. You should return your proxy card whether or not you plan to attend your stockholders meeting. If you attend your stockholders meeting, you may revoke your proxy at any time before it is voted and vote in person if you wish. Q: WHAT DO I DO IF I WANT TO CHANGE MY VOTE AFTER I HAVE SENT IN MY PROXY CARD? A: You can change your vote at any time before your proxy is voted at the meetings. You can do this in one of three ways. First, you can send a written notice stating that you would like to revoke your proxy. Second, you can complete and submit a new proxy card at a later date. If you choose either of these methods, you must submit your notice of revocation or your new proxy card to Harmonic or C-Cube Microsystems, as the case may be, before your stockholders meeting. Finally, you can attend your meeting and vote in person. Simply attending your meeting, however, will not revoke your proxy. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote. Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY SHARES FOR ME? A: Your broker will vote your shares only if you provide instructions on how to vote. If you do not provide your broker with instructions on how to vote, your broker's non-votes will have the same effect as votes against approval of the merger. You should follow the directions provided by your broker regarding how to instruct your broker to vote your shares. Q: WHAT CONSTITUTES A QUORUM AT THE STOCKHOLDERS' MEETINGS? A: A quorum is a majority of the outstanding shares entitled to vote which are present or represented by proxy at the special meetings. A quorum must exist for the transaction of business at the special meeting. If you submit a properly executed proxy card, even if you abstain from voting, your shares will be considered part of the quorum. Broker non-votes, which are shares held by a broker or 2 nominee that are represented at the special meeting, but with respect to which the broker or nominee is not empowered to vote on a proposal, are included in determining the presence of a quorum. Q: WHO CAN I CALL WITH QUESTIONS? A: Harmonic stockholders: Chase Mellon Consulting Services L.L.P. at (888) 566-9475. C-Cube Microsystems stockholders: Corporate Investor Communications, Inc. at (877) 313-0571. 3