IN THE CIRCUIT COURT OF THE 15TH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA SAMCO PARTNERS, on Behalf of Itself and All Others Similarly Situated, vs. Plaintiff, JOSEPH M. O DONNELL, EDWARD S. CROFT, III, LAWRENCE J. MATTHEWS, STEPHEN A. OLLENDORFF, PHILLIP A. O REILLY, BERT SAGER, A. EUGENE SAPP, JR., RONALD D. SCHMIDT, LEWIS SOLOMON, ARTESYN TECHNOLOGIES, INC., AND EMERSON ELECTRIC CO., Defendants. No. 2006 CA 002085 NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION TO: ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF COMMON STOCK OF ARTESYN TECHNOLOGIES, INC. (ARTESYN AT ANY TIME FROM FEBRUARY 2, 2006 UP TO AND INCLUDING APRIL 28, 2006. THIS NOTICE WAS SENT TO YOU BY ORDER OF THE COURT. PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THIS CLASS ACTION AND, IF YOU ARE A CLASS MEMBER, CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS CONCERNING THE SETTLEMENT DESCRIBED BELOW. IF YOU HELD SHARES OF ARTESYN STOCK FOR THE BENEFIT OF ANOTHER, PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO THE BENEFICIAL OWNER. This Notice is not a lawsuit against you, you are not being sued. You have received this Notice because you may be a member of the settlement class described in this Notice. I. PURPOSE OF THIS NOTICE This notice is given pursuant to an Order of the Circuit Court of the 15 th Judicial Circuit in and for Palm Beach County, Florida (the Court entered in the above-captioned action (the Action on July 31, 2006 (the Scheduling Order. The purpose of this Notice is to inform you of the pendency and proposed settlement of the Action (the Settlement, and the Court s conditional certification of a Settlement Class for purposes of the Settlement, and to notify you of a hearing to be held on October 20, 2006 at 8:00 a.m., before the Court at the 15th Judicial Circuit Court, 205 North Dixie Highway, Room: 9.1215, Courtroom Number: 9C, West Palm Beach, Florida 33401 (the Settlement Hearing for the purpose of determining: (i whether the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation is fair, reasonable, adequate and should be finally approved by the Court; (ii whether the Settlement Class should be finally certified and whether the Settlement Class Representative and Settlement Class Counsel have adequately represented the interests of the Settlement Class with respect to the Action and the claims asserted therein; (iii whether judgment should be entered pursuant to the Stipulation, among other things, dismissing the Action with prejudice; and (iv other matters relating to the proposed Settlement. The Court has determined that for purposes of the Settlement only, the Action shall be conditionally maintained as a class action pursuant to Fla. R. Civ. P. 1.220 on behalf of the Settlement Class. At the Settlement Hearing, the Court will also consider whether the Settlement Class should be permanently certified as a settlement class pursuant to Fla. R. Civ. P. 1.220, and whether Plaintiff and its counsel have adequately represented the Class. This Notice describes the rights that you may have pursuant to the Settlement and what steps you may, but are not required to take, in relation to the Settlement.
If the Court approves the Settlement, the Settling Parties (as defined below will ask the Court at the Settlement Hearing to enter an Order and Final Judgment dismissing the Action with prejudice on the merits and releasing all Settled Claims. The Court has reserved the right to adjourn the Settlement Hearing without further notice to the Class other than by announcement at the Settlement Hearing or any adjournment thereof. The Court has further reserved the right to approve the Settlement at or after the Settlement Hearing with such modifications as may be consented to by the Settling Parties and without further Notice to the members of the Class. II. HISTORY AND BACKGROUND OF THE SETTLEMENT THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT. IT IS BASED ON THE STATEMENTS OF THE PARTIES AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES. On February 2, 2006, Emerson Electric Co. ( Emerson and Artesyn Technologies, Inc. ( Artesyn announced that they had entered into an Agreement and Plan of Merger (the Merger Agreement, pursuant to which Emerson would acquire all of Artesyn s outstanding common stock for $11.00 per share in cash (the Merger. On February 23, 2006, Artesyn filed a preliminary proxy statement for the Merger on Form PREM14A (the Preliminary Proxy with the Securities and Exchange Commission. On March 2, 2006, the Action - a putative class action lawsuit challenging the Merger - was filed in the Circuit Court of the Fifteenth Judicial Circuit, Palm Beach County, Florida. On March 10, 2006, Plaintiff Samco Partners served its first request for production of documents to all defendants and notices of deposition for each of the defendants (the Discovery Demands. Between March 6 and March 16, 2006, counsel conferred concerning a possible resolution of the Action, and Plaintiff s counsel reviewed and provided comments on subsequent drafts of the Preliminary Proxy, which included demands by Plaintiff s counsel that additional information be included in the final proxy filed with the SEC and mailed to shareholders (the Merger Proxy Statement. On March 16, 2006 Plaintiff and Defendants (the Settling Parties executed a Memorandum of Understanding ( MOU detailing their agreement to settle the Action. On April 28, 2006 the Merger was approved by more than 99% of the shares that were voted and was thereafter consummated on that same day. Artesyn produced approximately 900 pages of documents to Plaintiff, and Plaintiff took the depositions (all testimony under oath of Lewis Solomon, Lead Independent Director of Artesyn and Chairman of the Strategic Planning Committee of Artesyn s Board of Directors, and Eric Wagner, a Senior Vice President at Lehman Brothers, Inc. (Artesyn s Financial Advisor. The Court has certified the Action as a class action, for settlement purposes only, pursuant to Florida Rule of Civil Procedure 1.220, on behalf of all persons or entities who owned Artesyn common stock at any time from February 2, 2006, through and including April 28, 2006, and all of their successors in interest and transferees, immediate and remote, but not Defendants and persons or entities related or affiliated with Defendants (the Settlement Class. The Court has designated as Settlement Class Counsel in the Action, Vianale & Vianale LLP, 2499 Glades Road, Suite 112, Boca Raton, Florida 33421, (561 392-4750, and The Brualdi Law Firm, 29 Broadway, 24 th Floor, New York, New York 10006, (212 952-0602. Settlement Class Counsel are available to answer any questions from Settlement Class Members concerning any matter contained in this Notice. III. REASONS FOR THE SETTLEMENT Plaintiff s counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Action through trial and through appeals. Plaintiff's counsel also have taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Action, as well as the difficulties and 2
delays inherent in such litigation. Plaintiff's counsel are also mindful of the inherent problems of proof and possible defenses to the violations asserted in the Action. Plaintiff s counsel have made a comprehensive and thorough investigation of the claims and allegations asserted in the Action, as well as the facts and circumstances relevant to the Action, through their independent investigation, their review of documents produced by Artesyn, their depositions of Lewis Solomon and Eric Wagner respectively, and through independent consultations with their own advisors and consultants regarding the Action. Based on their discovery and independent investigation, Plaintiff s counsel have determined that a settlement of the Action on the terms reflected in the Stipulation of Settlement (the Stipulation is fair, reasonable, adequate, and in the best interest of the class. Defendants, to avoid the costs, disruption, and distraction of further litigation, and without admitting the validity of any allegations made in the Action, or any liability with respect thereto, have concluded that it is desirable that the claims against them be settled on the terms reflected in the Stipulation. Defendants maintain that none has committed any breach of fiduciary duty, any disclosure violation or any other breach or violation whatsoever, including, but not limited to, in connection with the Merger, the price per share and other consideration offered by Emerson, the Merger Agreement, the Merger Proxy Statement, or any other disclosures regarding the terms of the Merger or Merger Agreement, but believe it desirable to settle the Action on the terms described herein. IV. THE PROPOSED SETTLEMENT A. Terms of the Proposed Settlement 1. In Settlement of the Action, Defendants agreed to reduce the termination fee, described in Paragraph 8.3(b of the Merger Agreement, payable by Artesyn to Emerson under certain circumstances from $15 million to $10 million. 2. Defendants also agreed to and did disclose additional information in the Merger Proxy Statement, including, among other things, the following: (i Additional disclosure regarding the agreement between Artesyn and Lehman Brothers Inc., including (A that Lehman Brothers will receive a fee of approximately $5.8 million for its services in connection with the Merger; (B that $1 million of that fee was paid for the delivery of Lehman Brothers fairness opinion, and that the remainder is contingent on completion of the Merger; and (C that Lehman Brothers is entitled to reimbursement of its expenses and indemnification by Artesyn for certain liabilities that may arise out of Lehman Brothers' engagement and its rendering of the fairness opinion. (ii Additional disclosure regarding the 17 potential buyers approached by Lehman Brothers in connection with the targeted process for sale of the entire company, as well as the criteria upon which those potential buyers were selected. (iii Additional disclosure regarding the initial introductory meeting between Artesyn s Chief Executive Officer and Emerson s President to discuss a potential business combination. (iv Additional information regarding the status of the due diligence investigation at the time of Emerson s revised indication of interest with a value range of $12.00-$12.25 per share in cash on September 26, 2005, and thereafter up to its subsequent offer on November 22, 2005, for $10.75 per share in cash. (v Additional information regarding the absence of other acceptable offers from the other parties. (vi Additional information regarding amounts that each director and/or executive officer of Artesyn was to receive in the Merger pursuant to the acceleration of unvested stock options. (vii $11.00 per share. (viii Additional information regarding the Artesyn Board of Directors determination to accept a bid of Additional information regarding the Lehman Brothers analysis, including: 3
EBITDA Analysis. Additional information on the information used by Lehman Brothers to perform its analysis. P/E Multiples. Additional information on the information used by Lehman Brothers to perform its analysis. (ix Disclosure regarding the Action. 3. Defendants acknowledge that the decision to disclose the above additional information in the Merger Proxy Statement and reduce the termination fee was a direct result of Plaintiff s lawsuit, the efforts of Plaintiff s counsel, and the negotiations between counsel for Plaintiff and Defendants. 4. Artesyn has agreed to pay the costs of notice to the class after its acquisition by Emerson so that the costs will be effectively borne by Emerson. V. RELEASE AND DISMISSAL OF CLAIMS ORDER AND FINAL JUDGMENT If, after Notice and the Settlement Hearing provided for herein, the Court approves this Settlement, the Settling Parties shall jointly ask the Court to enter an Order and Final Judgment which will, among other things: a. find the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation to be fair, reasonable, adequate and finally approve it; b. certify the Settlement Class and find that Settlement Class Representative and Settlement Class Counsel have adequately represented the interests of the Settlement Class with respect to the Action and the claims asserted therein; c. enter judgment pursuant to the Stipulation, among other things, dismissing the Action with prejudice; d. release all claims and rights, whether known or unknown, against the Defendants and their corresponding Released Parties, belonging to Plaintiff and any or all members of the putative class and their present or past heirs, executors, estates, administrators, predecessors, successors, assigns, parents, subsidiaries, associates, affiliates, employers, employees, agents, consultants, insurers, directors, managing directors, officers, partners, principals, members, attorneys, accountants, financial and other advisors, investment bankers, underwriters, lenders, and any other representatives of any of these persons and entities (including, without limitation, any claims, whether direct, derivative, representative or in any other capacity, arising under federal, state, local, statutory or common law or any law, rule or regulation, including the law of any jurisdiction outside the United States that relate in any way to any violation of state, federal or any foreign country s securities laws, any misstatement or omission, any breach of duty, any negligence or fraud (or any other alleged wrongdoing or misconduct and also relate in any way to the sale of Artesyn to Emerson, the fiduciary and other duties owed by Defendants to shareholders of Artesyn in connection therewith, Defendants disclosure obligations under federal, state or any other law in connection with the sale of Artesyn to Emerson, or any other claim related in any way to any of the foregoing (but excluding statutory claims for appraisal under Fla. Stat. 607.1301 and the sections that follow and also claims to enforce this Settlement; and e. permanently bar and enjoin the Plaintiff and all members of the Settlement Class from asserting, commencing, prosecuting or continuing, either directly, indirectly, individually, representatively, or in any other capacity, any of the Settled Claims as against any and all Released Parties. VI. NOTICE TO BROKERS AND OTHER NOMINEES The Court has ordered that record holders of common stock of Artesyn included in the Settlement Class send this Notice to all beneficial owners of such stock within five (5 days after receipt of the Notice or send a list of the names and addresses of such beneficial owners to the Notice Administrator within five (5 days of receipt of the Notice. You may obtain reimbursement of your reasonable and actual out-of-pocket disbursements that would not have been made but for this request by submitting an itemized statement to: Artesyn Technologies, Inc. Settlement c/o The Garden City Group, Inc. Notice Administrator PO Box 9000 #6455 Merrick, NY 11566-9000 4
VII. ATTORNEY S FEES The Settling Parties have also agreed to settle the claim of Plaintiff s counsel for attorneys fees and expenses incurred in connection with this litigation. The Settling Parties have agreed that Defendants will, subject to Court approval, pay attorneys fees and expenses to Plaintiff s counsel of $475,000. These monies will not be paid by Artesyn shareholders or from monies that would have otherwise been paid to Artesyn shareholders. VIII. SETTLEMENT HEARING The Settlement Hearing will be held on October 20, 2006 at 8:30 a.m., at the 15th Judicial Circuit Court, 205 North Dixie Highway, Room: 9.1215, Courtroom Number: 9C, West Palm Beach, Florida 33401 for the purpose of determining: (i whether the proposed Settlement of the Action on the terms and conditions provided for in the Stipulation is fair, reasonable, adequate and should be finally approved by the Court; (ii whether the Settlement Class should be finally certified and whether Settlement Class Representative and Settlement Class Counsel have adequately represented the interests of the Settlement Class with respect to the Action and the claims asserted therein; (iii whether the judgment should be entered pursuant to the Stipulation, among other things, dismissing the Action with prejudice; and (iv other matters relating to the proposed Settlement. The Court may adjourn the Settlement Hearing or any adjournment thereof without further notice to members of the Settlement Class other than by announcement at the Hearing or any adjournment thereof. The Court reserves the right to approve the Settlement at or after the Settlement Hearing with such modification as may be consented to by the Settling Parties and without further notice to the Settlement Class. Any Settlement Class member may, but is not required to, appear at the Settlement Hearing in person or by counsel and be heard in support of, or in opposition to, the fairness, reasonableness and adequacy of the Settlement. However, no Settlement Class Member shall be heard in opposition to the Settlement and no paper or brief submitted by any such person shall be received or considered by the Court unless no later than fourteen (14 days before the Settlement Hearing, that person shall file with the Clerk of this Court: (a a written notice of his, her or its intention to appear; (b proof that he, she or it is a Settlement Class Member; (c a written statement of the position he, she or it will assert; (d the reasons for his, her or its position; and (e all papers he, she or it intends to present to the Court in support of his, her or its position. In addition, such person must also file with the Clerk of this Court no later than fourteen (14 days before the Settlement Hearing a proof of service of such notice and papers upon the following: The Brualdi Law Firm Richard B. Brualdi, Esq. 29 Broadway 24 th Floor New York, NY 10006 Telephone: (212 952-0602 Counsel for Plaintiff HOLLAND & KNIGHT Tracy A. Nichols Louise Brais 701 Brickell Avenue Suite 3000 Miami, FL, 33131 Telephone: (305 789-7715 Counsel for Defendants Joseph M. O Donnell, Edward S. Croft, III, Lawrence J. Matthews, Stephen A. Ollendorff, Phillip A. O Reilly, Bert Sager, A. Eugene Sapp, Jr., Ronald D. Schmidt, Lewis Solomon, John M. Steel and Artesyn Technologies Inc. DAVIS POLK & WARDWELL Dennis E. Glazer Edmund Polubinski III 450 Lexington Avenue New York, NY 10017 Telephone: (212 450-4000 Counsel for Emerson Electric Co. 5
Any person who fails to object in the manner provided above shall be deemed to have waived the right to object (including any right of appeal and shall be forever barred from raising such objection in this or any other action or proceeding. IX. EXAMINATION OF PAPERS This notice contains only a summary of the terms of the proposed Settlement. For a more detailed statement of the matters involved in these proceedings, you may refer to the Stipulation and the other papers on file with the Court in the Action. IF YOU HAVE ANY QUESTIONS, PLEASE MAKE ALL INQUIRIES TO: Richard B. Brualdi, Esq. The Brualdi Law Firm 29 Broadway 24 th Floor New York, NY 10006 (877 495-1187 (toll free (212 952-0602 PLEASE DO NOT CALL OR WRITE THE COURT DIRECTLY. Dated: July 31, 2006. DISTRIBUTED BY ORDER OF THE CIRCUIT COURT OF THE 15TH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA 6