Fluke Corp – ‘DEF 14A’ for 7/7/98

As of:  Wednesday, 6/10/98   ·   For:  7/7/98   ·   Accession #:  950130-98-3049   ·   File #:  1-05590

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Schedule 14A                                         110    642K 

Document Table of Contents

DEF 14A
1st Page of 110
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
SCHEDULE 14A INFORMATION  

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF  
THE SECURITIES EXCHANGE ACT OF 1934 

Filed by the Registrant [X]                                                     

Filed by a Party other than the Registrant [_]                                  

Check the appropriate box:                                                      
[_] Preliminary Proxy Statement           [_] CONFIDENTIAL, FOR USE OF THE      
                         COMMISSION ONLY
                                    (AS PERMITTED BY RULE 14A-
                  6(E)(2))

[X] Definitive Proxy Statement                                                  

[_] Definitive Additional Materials                                             

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-   
12                                                                              

FLUKE CORPORATION 
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)  

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)  

Payment of Filing Fee (Check the appropriate box):                              

[_] No fee required                                                             

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.    

1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:          
Common Stock, par value $.25 per share, of Fluke Corporation ("Fluke    
Shares")                                                          

2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:             
18,275,747 Fluke Shares plus options to acquire up to 2,907,019 Fluke   
Shares ("Fluke Options"), which are to be converted in the Merger into  
Common Stock, par value $.01, of Danaher Corporation ("Danaher Shares") 

3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED         
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE 
FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):            
The underlying value of the transaction of $635,066,092 has been        
calculated pursuant to Exchange Act Rule 0-11 by multiplying (i)        
$71.5625 (the average of the high and low prices of the Danaher Shares  
on the New York Stock Exchange ("NYSE") on May 6, 1998) and (ii)        
8,874,286, the number of Danaher Shares proposed to be issued in the    
transaction, which is equal to the sum of (a) 8,267,765, the aggregate  
number of Danaher Shares to be issued in exchange for the 18,275,747    
outstanding Fluke Shares at the exchange ratio of 0.45239 and (b)       
606,521, the estimated number of Danaher Shares to be issued in respect 
of the 2,907,019 outstanding Fluke Options. Each Fluke Option is to be  
paid out in Danaher Shares based on its fair value (minus its exercise  
price). For purposes of estimating the proposed maximum aggregate value 
of the transaction, the closing price of Danaher Shares on the NYSE on  
May 6, 1998 (of $72.00) and the most recently calculated weighted       
average exercise price per Fluke Option (of $17.55 giving effect to the 
two-for-one stock split effected in September 1997) have been used to   
estimate the fair value of the Fluke Options).                          

4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:                         
$635,066,092                                                            

5) TOTAL FEE PAID:                                                          
$127,014                                                                

[X] Fee paid previously with preliminary materials filed on May 12, 1998.       

[_] Check box if any part of the fee is offset as provided by Exchange Act      
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was  
paid previously. Identify the previous filing by registration statement   
number, or the Form or Schedule and the date of its filing.               

1) AMOUNT PREVIOUSLY PAID:                                                  

2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:                            

3)FILING PARTY:                                                             

4) DATE FILED:                                                              

Notes:                                                                          

DEF 14A
2nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 2nd
FLUKE(R)                                                                        

6920 SEAWAY BOULEVARD 
EVERETT, WA 98203 

June 8, 1998  

Dear Stockholder:                                                               

As you may be aware, Fluke Corporation ("Fluke") has entered into an        
Agreement and Plan of Merger (the "Merger Agreement") with Danaher Corporation  
("Danaher"), providing for the acquisition of Fluke by Danaher. Pursuant to     
the Merger Agreement, a special meeting of stockholders of Fluke (the "Fluke    
Special Meeting") will be held at Fluke Park, 6920 Seaway Boulevard, Everett,   
WA 98203 on July 7, 1998 at 1:00 p.m.                                           

At the Fluke Special Meeting you will be asked to consider and vote upon a  
proposal to approve the Merger Agreement which provides for the merger of a     
wholly-owned subsidiary of Danaher with and into Fluke (the "Merger"). Upon     
consummation of the Merger, Fluke will become a wholly-owned subsidiary of      
Danaher. As a result of the Merger, each outstanding share of common stock of   
Fluke, par value $.25 per share, will be converted into 0.90478 of a share of   
common stock of Danaher, par value $.01 per share. The Merger Agreement is      
described more fully in the accompanying Proxy Statement/Prospectus.            

AFTER CAREFUL CONSIDERATION, THE FLUKE BOARD OF DIRECTORS HAS UNANIMOUSLY   
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, AND    
HAS CONCLUDED THEY ARE FAIR TO, AND IN THE BEST INTERESTS OF, FLUKE AND ITS     
STOCKHOLDERS. YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR    
OF THE MERGER AGREEMENT.                                                        

In the materials accompanying this letter you will find a Notice of Special 
Meeting of Stockholders, a Proxy Statement/Prospectus relating to the proposal  
to be voted upon at the Fluke Special Meeting and a Proxy Card. The Proxy       
Statement/Prospectus more fully describes the proposed transactions.            
Stockholders are urged to review carefully the information contained in the     
accompanying Proxy Statement/Prospectus, in particular the information under    
the captions "The Merger--Background of the Merger" and "--Reasons for the      
Merger; Recommendation of the Parties' Boards of Directors," prior to voting    
on the proposal.                                                                

All stockholders are cordially invited to attend the Fluke Special Meeting  
in person. If you attend the meeting, you may vote in person even though you    
may have previously returned your completed proxy. Whether or not you plan to   
attend the Fluke Special Meeting, it is important that your shares be           
represented and voted, regardless of the number of shares you hold. Approval    
of the Merger Agreement requires the affirmative vote of the holders of 66      
2/3% of the outstanding shares of Fluke Common Stock. Therefore, please         
complete, sign, date and return your proxy in the enclosed envelope. Please do  
not send in the stock certificate(s) representing your Fluke Common Stock at    
this time.                                                                      

On behalf of the Board, I thank you for your support and ask you to vote in 
favor of the Merger Agreement.                                                  

              Sincerely,

                                      /s/ William G. Parzybok, Jr.
                                          William G. Parzybok, Jr.
                                           Chairman of the Board and
                                           Chief Executive Officer

YOUR VOTE IS IMPORTANT--PLEASE RETURN YOUR PROXY PROMPTLY 

DEF 14A
3rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 3rd
FLUKE CORPORATION 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS 

To the Stockholders:                                                            

A Special Meeting of Stockholders of Fluke Corporation will be held in the  
Auditorium at the corporate headquarters of Fluke Corporation, 6920 Seaway      
Boulevard, Everett, Washington, on Tuesday, July 7, 1998, at 1:00 p.m. for the  
following purpose:                                                              

A. APPROVAL OF THE AGREEMENT AND PLAN OF MERGER. To approve the Agreement   
and Plan of Merger (the "Merger Agreement"), dated as of April 24, 1998, among  
Fluke Corporation ("Fluke"), Danaher Corporation, a Delaware corporation        
("Danaher"), and Falcon Acquisition Corp., a Washington corporation and         
wholly-owned subsidiary of Danaher ("Sub"), and to approve the merger of Sub    
with and into Fluke pursuant to which Fluke will become a wholly-owned          
subsidiary of Danaher and all outstanding shares of Fluke Common Stock will be  
converted into shares of Danaher Common Stock. The Merger Agreement is          
attached to the accompanying Proxy Statement/Prospectus as Annex A.             

B. OTHER BUSINESS. To transact such other business as may properly come     
before the meeting, and all adjournments or postponements thereof.              

The Board of Directors has fixed the close of business on June 5, 1998 as   
the record date for the determination of stockholders entitled to notice of,    
and to vote at, said Special Meeting. Fluke stockholders are entitled to        
dissenters' appraisal rights under Section 13.200 of the Washington Business    
Corporation Act ("WBCA") in connection with the Merger. Section 13 of the WBCA  
is attached to the accompanying Proxy Statement/Prospectus as Annex C.          

Information relating to the above proposal is set forth in the attached     
Proxy Statement/Prospectus. Approval of the Merger Agreement and approval of    
the merger described above will require the affirmative vote of the holders of  
two-thirds of the shares of Fluke common stock outstanding on the record date.  
All stockholders are cordially invited to attend the Fluke Special Meeting in   
person.                                                                         

                                      By order of the Board of Directors

                       Douglas G. McKnight
                                       Vice President, General Counsel and
                         Corporate Secretary

Everett, Washington                                                             
June 8, 1998                                                                    

WHETHER OR NOT YOU EXPECT TO ATTEND THE FLUKE SPECIAL MEETING, PLEASE       
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE     
ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.             

DEF 14A
4th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 4th
FLUKE CORPORATION 

PROXY STATEMENT 

----------------  
DANAHER CORPORATION 

PROSPECTUS  

----------------  

This Proxy Statement/Prospectus is being furnished to holders of common     
stock, $0.25 par value per share ("Fluke Common Stock"), of Fluke Corporation,  
a Washington corporation ("Fluke"), in connection with the solicitation of      
proxies by the Board of Directors of Fluke (the "Fluke Board") for use at the   
Special Meeting of Fluke stockholders to be held on July 7, 1998, at Fluke      
Park, 6920 Seaway Boulevard, Everett, WA 98203, commencing at 1:00 p.m.,        
Pacific Time, and at any adjournment or postponement thereof (the "Fluke        
Special Meeting"). At the Fluke Special Meeting, holders of Fluke Common Stock  
("Fluke Stockholders") as of the close of business on the Record Date (as       
hereinafter defined) will be asked to consider and vote on a proposal to        
approve the Agreement and Plan of Merger, dated as of April 24, 1998 (the       
"Merger Agreement"), providing for the merger (the "Merger") of Falcon          
Acquisition Corp. ("Sub"), a Washington corporation and a wholly owned          
subsidiary of Danaher Corporation, a Delaware corporation ("Danaher"), with     
and into Fluke. The Merger will be consummated on the terms and subject to the  
conditions set forth in the Merger Agreement, as a result of which (i) Fluke    
will become a wholly owned subsidiary of Danaher and (ii) Fluke Stockholders    
will be entitled to receive 0.90478 shares (the "Exchange Ratio") of Danaher    
common stock, par value $.01 per share ("Danaher Common Shares"), for each      
outstanding share of Fluke Common Stock held by them, with cash in lieu of      
fractional shares. See "The Merger Agreement--Terms of the Merger."             

This Proxy Statement/Prospectus also constitutes the Prospectus of Danaher  
with respect to up to 17,697,928 Danaher Common Shares to be issued by Danaher  
in the Merger described herein in exchange for the outstanding shares of Fluke  
Common Stock and options to purchase Fluke Common Stock. Danaher Common Shares  
are quoted on the New York Stock Exchange (the "NYSE") under the symbol "DHR".  
On June 5, 1998, the closing price of Danaher Common Shares on the NYSE         
Composite Tape was $35 15/16. Fluke Common Stock is also quoted on the NYSE     
under the symbol "FLK". On June 5, 1998, the closing price of Fluke Common      
Stock on the NYSE was $32 1/16. Because the market price of Danaher Common      
Stock is subject to fluctuation, the value of the shares of Danaher Common      
Stock that holders of Fluke Common Stock will receive in the Merger may         
increase or decrease prior to and after the Merger. Stockholders should obtain  
current quotes for the Danaher Common Shares and Fluke Common Stock.            

THE SECURITIES TO  BE ISSUED PURSUANT TO THIS  PROXY STATEMENT/PROSPECTUS HAVE  
NOT BEEN APPROVED OR DISAPPROVED  BY THE SECURITIES AND EXCHANGE COMMISSION OR  
ANY  STATE  SECURITIES  COMMISSION  NOR  HAS  THE  SECURITIES  AND  EXCHANGE  
COMMISSION  OR ANY STATE SECURITIES  COMMISSION PASSED UPON THE  ACCURACY OR  
ADEQUACY OF  THIS PROXY  STATEMENT/PROSPECTUS.  ANY REPRESENTATION  TO THE  
CONTRARY IS A CRIMINAL OFFENSE.                                             

All information contained or incorporated by reference in this Proxy        
Statement/Prospectus with respect to Danaher has been supplied by Danaher. All  
information contained or incorporated by reference in this Proxy                
Statement/Prospectus with respect to Fluke has been supplied by Fluke.          

This Proxy Statement/Prospectus, the Letter to Fluke Stockholders, the      
Notice of the Fluke Special Meeting and the form of proxy for use at the Fluke  
Special Meeting are first being mailed to Fluke Stockholders on or about June   
8, 1998. Any stockholder who has given his proxy may revoke it at any time      
prior to its use. See "The Fluke Special Meeting--Voting of Proxies."           

----------------  

The date of this Proxy Statement/Prospectus is June 8, 1998.  

DEF 14A
5th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 5th
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY              
REPRESENTATION NOT CONTAINED HEREIN OR IN THE DOCUMENTS INCORPORATED BY         
REFERENCE HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION      
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY                   
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF  
AN OFFER TO BUY SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY              
JURISDICTION IN WHICH OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH      
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROXY  
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF DANAHER COMMON SHARES MADE         
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE     
HAS BEEN NO CHANGE IN THE AFFAIRS OF DANAHER OR FLUKE SINCE THE DATE HEREOF OR  
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT   
AS OF ANY TIME AFTER THE DATE HEREOF.                                           

----------------  
AVAILABLE INFORMATION 

Each of Danaher and Fluke is subject to the informational requirements of   
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in    
accordance therewith files reports, proxy statements, and other information     
with the Securities and Exchange Commission (the "Commission"). Such reports,   
proxy statements, and other information filed by either Danaher or Fluke with   
the Commission can be inspected and copied at the public reference facilities   
maintained by the Commission at its principal office at 450 Fifth Street,       
N.W., Room 1024, Washington, D.C. 20549, and at the following Regional Offices  
of the Commission: New York Regional Office, 7 World Trade Center, 13th Floor,  
New York, New York 10048, and Chicago Regional Office, Citicorp Center, 500     
West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such material can  
also be obtained from the Public Reference Section of the Commission at 450     
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission  
maintains an Internet worldwide web site that contains reports, proxy and       
information statements and other information regarding issuers, like Danaher    
and Fluke, who file electronically with the Commission. The address of that     
site is http://www.sec.gov. The Danaher Common Shares and Fluke Common Stock    
are both listed on the NYSE, and such reports, proxy statements and other       
information concerning Danaher or Fluke are also available for inspection and   
copying at the offices of the NYSE, 20 Broad Street, New York, New York 10005.  

Danaher has filed with the Commission a Registration Statement on Form S-4  
under the Securities Act of 1933, as amended (the "Securities Act"), with       
respect to Danaher Common Shares to be issued in the Merger (the "Registration  
Statement"). This Proxy Statement/Prospectus does not contain all of the        
information set forth in the Registration Statement, certain parts of which     
are omitted in accordance with the rules and regulations of the Commission.     
Reference is hereby made to the Registration Statement and related exhibits     
for further information with respect to Danaher and the securities offered      
hereby. Statements contained herein concerning the provisions of any document   
are necessarily summaries of such documents and not complete, and in each       
instance, reference is made to the copy of such document attached hereto or     
filed as an exhibit to the Registration Statement or otherwise filed with the   
Commission. Each such statement is qualified in its entirety by such            
reference.                                                                      

ii  

DEF 14A
6th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 6th
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

The following documents filed by Danaher with the Commission pursuant to the
Exchange Act (Commission File No. 001-08089) are hereby incorporated by         
reference in this Proxy Statement/Prospectus:                                   

1. The description of Danaher Common Shares contained in Danaher's      
Registration Statement on Form 8-B dated November 3, 1986, including all    
amendments and reports filed for the purpose of updating such description;  

2. Danaher's Annual Report on Form 10-K for the fiscal year ended       
December 31, 1997, filed with the Commission on March 17, 1998, including   
the portions of the Danaher Annual Report to Shareholders incorporated      
therein (the "1997 Danaher Form 10-K");                                     

 3. The information contained in Danaher's Proxy Statement dated March 30,
1998 for its Annual Meeting of Shareholders to be held on May 5, 1998 that  
has been incorporated by reference in the 1997 Danaher Form 10-K and was    
filed with the Commission on Schedule 14A on March 17, 1998; and            

4. Danaher's Quarterly Report on Form 10-Q for the quarter ended March  
27, 1998.                                                                   

The following documents filed by Fluke with the Commission pursuant to the  
Exchange Act (Commission File No. 001-05590) are hereby incorporated by         
reference in this Proxy Statement/Prospectus:                                   

1. The description of Fluke Common Stock contained in Fluke's           
Registration Statement on Form 8-A dated March 10, 1995, including any      
amendment or report filed for the purpose of updating such description;     

 2. Fluke's Annual Report on Form 10-K for the fiscal year ended April 25,
1997, filed with the Commission on July 23, 1997, including the portions of 
the Fluke Annual Report to Stockholders incorporated therein (the "1997     
Fluke Form 10-K");                                                          

3. The information contained in Fluke's Proxy Statement dated July 17,  
1997 for its Annual Meeting of Stockholders held on September 10, 1997 that 
has been incorporated by reference in the 1997 Fluke Form 10-K and was      
filed with the Commission on Schedule 14A on July 21, 1997;                 

 4. Fluke's Quarterly Reports on Form 10-Q for the quarters ended July 25,
1997, October 24, 1997 and January 23, 1998; and                            

5. Fluke's Current Report on Form 8-K dated April 24, 1998.             

All reports and other documents filed with the Commission by Danaher or     
Fluke pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after   
the date of this Proxy Statement/Prospectus and prior to the Fluke Special      
Meeting shall be deemed to be incorporated by reference herein and to be a      
part hereof from the respective dates of the filing of such reports and other   
documents. Any statement contained herein or in a document incorporated or      
deemed to be incorporated by reference herein shall be deemed to be modified    
or superseded for all purposes to the extent that a statement contained herein  
or in any other subsequently filed document that is also incorporated or        
deemed to be incorporated by reference herein modifies or supersedes such       
statement. Any such statement so modified or superseded shall not be deemed,    
except as so modified or superseded, to constitute a part of this Proxy         
Statement/Prospectus.                                                           

iii 

DEF 14A
7th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 7th
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WITH    
RESPECT TO DANAHER AND FLUKE THAT ARE NOT PRESENTED HEREIN OR DELIVERED         
HEREWITH. COPIES OF THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH DOCUMENTS   
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH         
DOCUMENTS OR HEREIN) ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS    
PROXY STATEMENT/PROSPECTUS IS DELIVERED UPON WRITTEN OR ORAL REQUEST TO THE     
FOLLOWING:                                                                      

                                                                [Download Table]

DANAHER DOCUMENTS            FLUKE DOCUMENTS            
-----------------            ---------------------------
                                                        
Danaher Corporation          Fluke Corporation          
1250 24th Street, N.W.       6920 Seaway Boulevard      
Washington, D.C. 20037       Everett, WA 98203          
Attention: C. Scott Brannan  Attention: Douglas McKnight

IN ORDER TO ENSURE TIMELY DELIVERY, ANY REQUEST FOR DOCUMENTS SHOULD BE MADE
BY JUNE 30, 1998.                                                               

THIS PROXY STATEMENT/PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS,        
INCLUDING STATEMENTS CONCERNING POSSIBLE OR ASSUMED FUTURE RESULTS OF           
OPERATIONS OF DANAHER AND FLUKE SET FORTH UNDER "THE MERGER--REASONS FOR THE    
MERGER; RECOMMENDATION OF THE PARTIES' BOARDS OF DIRECTORS" AND "--OPINION OF   
FLUKE'S FINANCIAL ADVISOR" AND THOSE PRECEDED BY, FOLLOWED BY OR THAT INCLUDE   
THE WORDS "BELIEVES," "EXPECTS," "ANTICIPATES" OR SIMILAR EXPRESSIONS. FOR      
THOSE STATEMENTS, THE COMPANIES CLAIM THE PROTECTION OF THE SAFE HARBOR FOR     
FORWARD-LOOKING STATEMENTS CONTAINED IN THE PRIVATE SECURITIES LITIGATION       
REFORM ACT OF 1995. YOU SHOULD UNDERSTAND THAT THE FOLLOWING IMPORTANT          
FACTORS, IN ADDITION TO THOSE DISCUSSED ELSEWHERE IN THIS DOCUMENT AND IN THE   
DOCUMENTS WHICH THE COMPANIES INCORPORATE BY REFERENCE, COULD AFFECT THE        
FUTURE RESULTS OF DANAHER AND FLUKE, AND COULD CAUSE THOSE RESULTS TO DIFFER    
MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS: CHANGES IN  
DANAHER'S LONGSTANDING RELATIONSHIP WITH MAJOR CUSTOMERS; THE EXTENT TO WHICH   
ACQUIRED BUSINESSES ARE ABLE TO MEET DANAHER'S EXPECTATIONS AND OPERATE         
PROFITABLY; CHANGES IN REGULATIONS WHICH COULD AFFECT DEMAND FOR PRODUCTS AND   
UNANTICIPATED DEVELOPMENTS THAT COULD OCCUR WITH RESPECT TO CONTINGENCIES SUCH  
AS ENVIRONMENTAL MATTERS AND LITIGATION; MATERIALLY ADVERSE CHANGES IN          
ECONOMIC CONDITIONS IN THE MARKETS SERVED BY THE COMPANIES OR IN THE ECONOMY    
IN GENERAL; A SIGNIFICANT DELAY IN THE EXPECTED CLOSING OF THE MERGER; GREATER  
THAN EXPECTED COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE           
BUSINESSES OF DANAHER AND FLUKE; AND OTHER RISKS AND UNCERTAINTIES AS MAY BE    
DETAILED FROM TIME TO TIME IN DANAHER'S AND/OR FLUKE'S PUBLIC ANNOUNCEMENTS     
AND COMMISSION FILINGS.                                                         

iv  

DEF 14A
8th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 8th
TABLE OF CONTENTS 

                                                                [Download Table]

                                                                           PAGE
                                                                           ----
                                                                               
AVAILABLE INFORMATION.....................................................  ii 
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... iii 
SUMMARY...................................................................   1 
  The Companies...........................................................   1 
  The Fluke Special Meeting...............................................   1 
  The Merger..............................................................   2 
  Certain Federal Income Tax Consequences.................................   8 
  Comparison of Stockholder Rights........................................   8 
  Amendment to Fluke Rights Plan..........................................   8 
  Certain Significant Considerations......................................   8 
  Summary Historical and Unaudited Pro Forma Financial Information........   9 
  Unaudited Pro Forma Combined Summary Financial Information..............  11 
COMPARATIVE PER SHARE DATA................................................  12 
MARKET PRICE AND DIVIDEND DATA............................................  13 
THE FLUKE SPECIAL MEETING.................................................  14 
  General.................................................................  14 
  Matters to be Considered at the Fluke Special Meeting...................  14 
  Record Date; Vote Required; Voting at the Meeting.......................  14 
  Voting of Proxies.......................................................  14 
  Solicitation of Proxies.................................................  15 
  Appraisal Rights........................................................  15 
THE MERGER................................................................  16 
  Background of the Merger................................................  16 
  Reasons for the Merger; Recommendation of the Parties' Boards of Direc-      
   tors...................................................................  17 
  Opinion of Fluke's Financial Advisor....................................  19 
  Interests of Certain Persons in the Merger..............................  23 
  Accounting Treatment....................................................  24 
  Regulatory Approvals....................................................  25 
  Federal Securities Law Consequences.....................................  25 
  Stock Option Agreement..................................................  26 
  Stockholders Support Agreements.........................................  27 
  Amendments to Retention Agreements......................................  29 
  Management and Operations After the Merger..............................  30 
THE MERGER AGREEMENT......................................................  31 
  Terms of the Merger.....................................................  31 
  Effect on Capital Stock.................................................  31 
  Representations and Warranties..........................................  33 
  Certain Covenants.......................................................  34 
  Closing Conditions......................................................  37 
  Amendment; Termination; Expenses........................................  39 
CERTAIN FEDERAL INCOME TAX CONSEQUENCES...................................  42 
THE COMPANIES.............................................................  43 
  Business of Danaher.....................................................  43 
  Business of Fluke.......................................................  43 

i 

DEF 14A
9th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 9th
                                                                [Download Table]

                                                                            PAGE
                                                                            ----
                                                                                
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION.........................  44 
  Unaudited Pro Forma Combined Balance Sheet...............................  44 
  Unaudited Pro Forma Combined Statements of Earnings......................  45 
COMPARISON OF STOCKHOLDER RIGHTS...........................................  47 
  Size and Classification of the Board of Directors........................  47 
  Removal of Directors.....................................................  47 
  Special Meetings of Stockholders.........................................  48 
  Amendment to Certificate/Articles of Incorporation.......................  48 
  Provisions Relating to Acquisitions and Business Combinations............  48 
  Mergers, Acquisitions and Other Transactions.............................  50 
  Action Without a Meeting.................................................  50 
  Appraisal or Dissenters' Rights..........................................  50 
  Indemnification of Directors and Officers................................  51 
  Dividends................................................................  51 
DESCRIPTION OF DANAHER CAPITAL STOCK.......................................  52 
APPRAISAL RIGHTS...........................................................  52 
LEGAL MATTERS..............................................................  54 
EXPERTS....................................................................  55 

ANNEXES:                                                                        
A--Agreement and Plan of Merger, dated April 24, 1998, among Danaher            
Corporation, Falcon Acquisition Corp. and Fluke Corporation               
B--Opinion of Salomon Smith Barney, dated April 24, 1998                        
C--Section 23B.13 of the Washington Business Corporation Act                    

ii  

DEF 14A
10th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 10th
SUMMARY 

 The following is a summary of certain information contained elsewhere in this
Proxy Statement/Prospectus and the Annexes hereto (the "Proxy                   
Statement/Prospectus"). This summary is not intended to be complete and is      
qualified in its entirety by the more detailed information and financial        
statements appearing elsewhere or incorporated by reference in this Proxy       
Statement/Prospectus. Fluke Stockholders are urged to read and consider         
carefully all of the information contained or incorporated by reference in this 
Proxy Statement/Prospectus, including the Annexes.                              

THE COMPANIES 

FLUKE                                                                           

Fluke was founded in 1948 and incorporated under the laws of the State of   
Washington on October 7, 1953. Fluke is engaged in the design, manufacture and  
marketing of compact, professional electronic test tools. Fluke's principal     
products are portable instruments that measure voltage, current, power quality, 
frequency, temperature, pressure and other key functional parameters of         
electronic equipment. The principal executive offices of Fluke are located at   
6920 Seaway Boulevard, Everett, Washington 98203, and its telephone number is   
(425) 347-6100.                                                                 

DANAHER                                                                         

 Danaher, a Delaware corporation, conducts its operations through two business
segments, Tools and Components (including general purpose mechanics' hand       
tools, automotive specialty tools, hardware and components for the power        
generation and transmission industries and high quality miniature precision     
parts) and Process/Environmental Controls (including underground storage tank   
leak detection systems and temperature, level and position sensing devices,     
power switches and controls, communication line products, power protection      
products, liquid flow measuring devices, telecommunications products, quality   
assurance products and systems, and electronic and mechanical counting and      
controlling devices). The principal executive offices of Danaher are located at 
1250 24th Street, N.W., Washington, D.C. 20037, and its telephone number is     
(202) 828-0850.                                                                 

THE FLUKE SPECIAL MEETING 

DATE, TIME AND PLACE OF FLUKE SPECIAL MEETING                                   

The Fluke Special Meeting will be held at Fluke Park, 6920 Seaway Boulevard,
Everett, WA 98203, on July 7, 1998, at 1:00 p.m., Pacific Time, for the         
following purposes:                                                             

1. To consider and vote on a proposal (the "Fluke Merger Proposal") to  
approve the Merger Agreement pursuant to which, among other things, (i) Sub 
will be merged with and into Fluke with the result that Fluke becomes a     
wholly owned subsidiary of Danaher, and (ii) each outstanding share (other  
than shares held in the treasury of Fluke, if any, which will be canceled)  
of Fluke Common Stock will be converted into a number of Danaher Common     
Shares equal to the Exchange Ratio as set forth in the Merger Agreement.    
The Merger Agreement is attached to this Proxy Statement/Prospectus as      
Annex A.                                                                    

2. Such other matters as may properly come before the Fluke Special     
Meeting.                                                                    

RECORD DATE                                                                     

Only Fluke Stockholders of record at the close of business on June 5, 1998  
(the "Record Date"), will be entitled to notice of and to vote at the Fluke     
Special Meeting. On the Record Date, there were 18,389,535 shares of Fluke      
Common Stock outstanding. See "The Fluke Special Meeting."                      

1 

DEF 14A
11th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 11th
REQUIRED VOTE                                                                   

The Fluke Merger Proposal requires the affirmative vote of the holders of 66
2/3% of the shares of Fluke Common Stock outstanding and entitled to vote       
thereon. As of the Record Date, the directors and executive officers of Fluke   
and certain of their affiliates may be deemed to be beneficial owners of        
approximately 11.7% of the outstanding Fluke Common Stock and each such person  
has advised Fluke that he, she or it intends to vote in favor of the Fluke      
Merger Proposal. In addition, certain stockholders of Fluke (including certain  
directors of Fluke and certain of their affiliates), who as of the Record Date  
beneficially owned in the aggregate approximately 11.3% of the outstanding      
Fluke Common Stock, have each agreed to vote or direct the vote of all Fluke    
Common Stock over which such person has voting control in favor of the Fluke    
Merger Proposal. See "The Fluke Special Meeting--Record Date; Vote Required;    
Voting at the Meeting" and "The Merger--Stockholders Support Agreements."       

REVOCABILITY OF PROXIES                                                         

Any Fluke Stockholder returning a proxy has the power to revoke it at any   
time before shares of Fluke Common Stock represented by the proxy are voted at  
the meeting. A Fluke Stockholder may also revoke his proxy by attending the     
meeting and voting at the meeting. Any shares of Fluke Common Stock represented 
by an unrevoked proxy will be voted unless the stockholder attends the meeting  
and votes in person. A Fluke Stockholder's right to revoke his proxy is not     
limited by or subject to compliance with a specified formal procedure, but      
written notice should be given to the Corporate Secretary of Fluke at or before 
the meeting so that the number of shares represented by proxy can be            
appropriately adjusted.                                                         

APPRAISAL RIGHTS                                                                

Fluke Stockholders will be entitled to dissenters' appraisal rights in      
connection with the Merger if they follow the procedures specified for          
perfecting such rights. It is a condition to Danaher's obligation to consummate 
the Merger that holders of no more than 5% of the outstanding shares of Fluke   
Common Stock assert dissenters' appraisal rights. See "Appraisal Rights" and    
"Comparison of Stockholder Rights--Appraisal or Dissenters' Rights."            

THE MERGER

GENERAL; EXCHANGE RATIO                                                         

 Pursuant to the Merger Agreement, each share of Fluke Common Stock issued and
outstanding immediately prior to the Effective Time, other than shares held in  
the treasury of Fluke, if any, which will be canceled, or any Dissenting Shares 
(as hereinafter defined) will be converted into and represent that number of    
Danaher Common Shares equal to the Exchange Ratio.                              

The Exchange Ratio is 0.90478. If, prior to the Effective Time, Danaher     
should split or combine the Danaher Common Shares, or pay a stock dividend or   
other stock distribution in Danaher Common Shares, then the Exchange Ratio will 
be appropriately adjusted to reflect such split, combination, dividend or other 
distribution. If the average price of the Danaher Common Shares over a two-day  
period commencing on the Determination Date (as hereinafter defined) is less    
than $31.94 (equivalent to a value of approximately $28.90 per share of Fluke   
Common Stock), then the Fluke Board will have the right to terminate the Merger 
Agreement, subject to Danaher's right to increase the Exchange Ratio to provide 
a value of $28.90 per share of Fluke Common Stock. See "The Merger Agreement--  
Amendment; Termination; Expenses."                                              

2 

DEF 14A
12th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 12th
FLUKE OPTIONS                                                                   

At the Effective Time, Fluke and Danaher shall take all necessary action to 
provide that all outstanding stock options to purchase shares of Fluke Common   
Stock ("Stock Options") heretofore granted under any stock option or stock      
appreciation rights plan, program or arrangement of Fluke (collectively, the    
"Stock Option Plans") will be canceled and retired and shall cease to exist,    
and that each holder of a Stock Option, whether or not then exercisable, shall  
receive with respect to such Stock Option, without any action on the part of    
such holder, the number of Danaher Common Shares equal to (i) the Fair Value of 
such Stock Option (as hereinafter defined) divided by (ii) the Closing Danaher  
Stock Price (as hereinafter defined). As of the Record Date, 2,792,263 shares   
of Fluke Common Stock were issuable upon the exercise of outstanding Fluke      
Options, which options, based upon the Exchange Ratio of 0.90478 (and assuming  
a Closing Danaher Stock Price of $35 15/16, the closing price of Danaher Common 
Stock on the NYSE on June 5, 1998), will be converted to become approximately   
1,162,788 Danaher Common Shares in the aggregate. See "The Merger--Interests of 
Certain Persons in the Merger--Fluke Options."                                  

EFFECTIVE TIME OF THE MERGER; CLOSING DATE                                      

The Merger will become effective (the "Effective Time") when Articles of    
Merger are filed with the Washington Secretary of State or at such later time   
as is specified in the Articles of Merger. This filing will be made on a date   
(the "Closing Date") set by Danaher, which date will be within two business     
days following the date upon which all conditions set forth in the Merger       
Agreement have been satisfied or waived, as the case may be. See "The Merger    
Agreement--Closing Conditions."                                                 

CONDITIONS TO CONSUMMATION OF THE MERGER                                        

 Consummation of the Merger is subject to, among other things, (i) approval by
the Fluke Stockholders of the Merger and the transactions contemplated thereby, 
(ii) no temporary restraining order, preliminary or permanent injunction or     
other order or decree being in effect which prevents the consummation of the    
Merger, (iii) expiration or termination of the applicable waiting period under  
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR  
Act") (and any extension thereof), (iv) the Commission having declared the      
Registration Statement effective, and at the Effective Time, no stop order or   
similar restraining order prohibiting the Merger having been threatened or      
entered by the Commission, (v) receipt by Danaher and Fluke of legal opinions   
to the effect that the Merger will qualify as a tax-free reorganization for     
federal income tax purposes, (vi) receipt by Danaher of a letter, in form and   
substance reasonably satisfactory to Danaher, from Arthur Andersen LLP with     
respect to qualification of the Merger as a pooling-of-interests for accounting 
and financial reporting purposes, (vii) the listing of the Danaher Common Stock 
to be issued in the Merger on the NYSE having been approved (subject to         
official notification of issuance), (viii) all necessary consents and           
authorizations having been obtained, (ix) no action being pending or threatened 
by any Governmental Entity (as defined in the Merger Agreement) which seeks to  
prevent consummation of the Merger, and (x) receipt by Danaher of signed        
affiliate agreements from each person who may be deemed to be an affiliate of   
Fluke.                                                                          

In addition, consummation of the Merger by each of Danaher and Fluke is     
conditioned upon the other party's representations and warranties being true    
and correct on and as of the Closing Date (except for those made as of a        
specified time) except as could not reasonably be expected to result in a       
material adverse effect (as hereinafter defined) on the other party and         
performance in all material respects of each of the covenants to be performed   
or complied with by the other party. It is also a condition to Danaher's        
obligation to consummate the Merger that the number of Dissenting Shares (as    
hereinafter defined) do not constitute more than 5% of the outstanding shares   
of Fluke Common Stock. See "The Merger--Accounting Treatment," "--Interests of  
Certain Persons in the Merger," "--Regulatory Approvals," "The Merger           
Agreement--Representations and Warranties," "--Certain Covenants" and "--       
Closing Conditions."                                                            

3 

DEF 14A
13th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 13th
ACCOUNTING TREATMENT                                                            

The Merger is intended to qualify as a pooling-of-interests for accounting  
and financial reporting purposes. Consummation of the Merger is conditioned on, 
among other matters, Danaher's receipt of a letter, in form and substance       
reasonably satisfactory to Danaher, from Arthur Andersen LLP to the effect that 
the Merger will qualify as a pooling-of-interests. See "The Merger--Accounting  
Treatment."                                                                     

NO SOLICITATION                                                                 

Fluke has agreed that, prior to the Effective Time or earlier termination of
the Merger Agreement, neither Fluke nor any of its officers, employees,         
representatives, agents or affiliates will, directly or indirectly, encourage,  
solicit or participate in discussions or negotiations with any person (other    
than Danaher) concerning any merger, consolidation, share exchange or similar   
transaction, or any transaction that would involve the transfer or potential    
transfer of control of Fluke, other than the transactions contemplated by the   
Merger Agreement, except that Fluke may take certain actions, including         
withdrawing or modifying its approval of the Merger Agreement, to the extent    
required by the fiduciary obligations of the Fluke Board and in accordance with 
the provisions of the Merger Agreement upon the receipt by the Fluke Board of a 
Superior Proposal (as hereinafter defined). See "The Merger Agreement--No       
Solicitation."                                                                  

TERMINATION; EXPENSES                                                           

The Merger Agreement may be terminated at any time prior to the Effective   
Time, whether before or after approval of matters presented in connection with  
the Merger by the Fluke Stockholders (i) by mutual written consent of Danaher   
and Fluke; (ii) by Danaher, upon certain material breaches of Fluke's           
representations, warranties, covenants or agreements; (iii) by Fluke, upon      
certain material breaches of Danaher's representations, warranties, covenants   
or agreements; (iv) by either Danaher or Fluke, if any Governmental Entity      
shall have issued an order, decree or ruling or taken any other action          
permanently enjoining, restraining or otherwise prohibiting the consummation of 
the Merger and such order, decree or ruling or other action shall have become   
final and nonappealable; (v) by either Danaher or Fluke, if the Merger shall    
not have occurred by October 31, 1998, unless the failure to consummate the     
Merger is the result of a breach of the Merger Agreement by the party seeking   
to terminate the Merger Agreement; (vi) by either Danaher or Fluke, if the      
requisite approval of the Fluke Stockholders shall not have been obtained;      
(vii) by Danaher, if the Fluke Board shall withdraw, modify or change its       
recommendation of the Merger Agreement or the Merger in any manner adverse to   
Danaher, or if Fluke or any of its material subsidiaries shall have entered     
into (or resolved or announced its intention to enter into) an agreement with   
respect to any Alternative Transaction (as hereinafter defined), or if the      
Fluke Board shall have recommended to the Fluke Stockholders a Takeover         
Proposal (as hereinafter defined) or shall have so resolved; or if any person   
(other than Danaher and its subsidiaries) shall have acquired beneficial        
ownership of more than 10% of the then outstanding shares of capital stock of   
Fluke (except that certain existing interests shall not give rise to any        
termination right thereunder); (viii) by Fluke, if it shall enter into an       
agreement with respect to a Superior Proposal in accordance with the provision  
of the Merger Agreement, including payment of the Termination Fee and the       
Expense Fee (each as hereinafter defined); and (ix) by Fluke, if, at any time   
during a set period close to the Effective Time, the average of the daily last  
sale prices of Danaher Common Shares as reported on the NYSE Composite          
Transactions reporting system shall be less than $31.94 (subject to Danaher's   
right to increase the Exchange Ratio to provide at least $28.90 in value in     
Danaher Common Shares per share of Fluke Common Stock (based on the same        
measuring period)). The Fluke Board may, after taking certain facts and         
circumstances into consideration, elect not to terminate the Merger Agreement   
pursuant to clause (ix) above. By approving the Merger Agreement, Fluke         
Stockholders would be permitting the Fluke Board to determine, in the exercise  
of its fiduciary duties, to proceed with the Merger even though the value       
received per share of Fluke Common Stock was less than $28.90 because the       
average daily last sales prices of Danaher Common Shares, as determined by the  
method described above, was below $31.94.                                       

As set forth in the Merger Agreement, Fluke shall pay, or cause to be paid, 
in same day funds to Danaher upon demand an amount equal to $17 million (the    
"Termination Fee") plus Danaher's aggregate expenses                            

4 

DEF 14A
14th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 14th
incurred in connection with the Merger Agreement up to $3 million (the "Expense 
Fee") (i) if the Merger Agreement is terminated as a result of a material       
breach by Fluke of its agreements to hold the Fluke Stockholders Meeting and    
recommend the Merger to Fluke Stockholders; (ii) if Fluke terminates the Merger 
Agreement in order to enter into any agreement with respect to any Superior     
Proposal; (iii) if the Merger Agreement is terminated by Danaher, because any   
person or group (other than Danaher or its subsidiaries) acquires or has the    
right to acquire more than 10% of the outstanding shares of Fluke Common Stock  
(with certain exceptions) and prior to such termination, any such person or     
group shall have refused or failed to deliver to Danaher upon request a binding 
commitment not to take any action that may frustrate the transactions           
contemplated by the Merger Agreement and within one year after the date of such 
termination of the Merger Agreement, Fluke consummates an Alternative           
Transaction; provided, that Fluke shall make a nonrefundable payment of $5      
million (which amount shall be credited to Termination Fee or the Expense Fee)  
upon the termination of the Merger Agreement for this reason; (iv) if the       
Merger Agreement is terminated by Danaher as a result of the Fluke Board        
withdrawing, modifying or changing its recommendation in any manner adverse to  
Danaher or recommending a competing Takeover Proposal, or as a result of Fluke  
or any of Fluke's material subsidiaries having entered into an agreement with   
respect to an Alternative Transaction (or the Fluke Board having resolved to do 
any of these things); or (v) if the Merger Agreement is terminated following a  
failure to obtain the requisite approval of Fluke Stockholders and at the time  
of the Fluke Special Meeting there existed a Takeover Proposal or a third party 
shall have indicated its intention to make a Takeover Proposal or shall have    
solicited proxies or consents in opposition to the Merger and within one year   
after the date of such termination of the Merger Agreement, Fluke consummates   
an Alternative Transaction. Notwithstanding the foregoing, the total amount     
payable as to Danaher in the form of a Termination Fee and Expense Fee and the  
Option Repurchase Price (as hereinafter defined) shall not exceed $20 million.  
See "The Merger Agreement--Stock Option Agreement" and "--Amendment;            
Termination; Expenses."                                                         

REASONS FOR THE MERGER; RECOMMENDATION OF THE PARTIES' BOARDS OF DIRECTORS      

Fluke. The Fluke Board identified a number of potential advantages of the   
Merger to the Fluke Stockholders. See "The Merger--Reasons for the Merger;      
Recommendation of the Parties' Boards of Directors." These advantages include,  
among others:                                                                   

-- The Merger is expected to provide Fluke Stockholders with Danaher Common 
Shares at a significant premium over the market price for shares of   
Fluke Common Stock prevailing prior to the public announcement of the 
Merger in a tax-free exchange.                                        

-- Such premium is especially significant considering Fluke's expected      
  decline in earnings for the fourth quarter of fiscal year 1998, ended on
April 24, 1998.                                                       

-- The fixed Exchange Ratio will allow Fluke Stockholders to share fully in 
any potential increases in the price of Danaher Common Shares.        

-- The Fluke Board reserved the right to terminate the Merger Agreement in  
 the event that the price of Danaher Common Shares falls below a certain
 level thus ensuring that if the Merger goes forward, Fluke Stockholders
  will receive a guaranteed minimum value for their shares of Fluke Common
Stock.                                                                

-- The Merger should provide Fluke with greater resources to support its    
marketing, distribution, product development and potential acquisition
efforts.                                                              

 AT A SPECIAL MEETING OF THE FLUKE BOARD HELD ON APRIL 24, 1998, THE DIRECTORS
UNANIMOUSLY DETERMINED THAT THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF  
FLUKE AND FLUKE STOCKHOLDERS, UNANIMOUSLY APPROVED THE MERGER, AND UNANIMOUSLY  
RECOMMENDED APPROVAL OF THE MERGER AGREEMENT BY FLUKE STOCKHOLDERS.             

5 

DEF 14A
15th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 15th
Danaher. The Danaher Board of Directors (the "Danaher Board"), in the course
of reaching its decision to approve the Merger Agreement and the transactions   
contemplated thereby, considered a number of factors, including the fact that   
Fluke has a leading brand in its business segment and broad geographic          
coverage, as well as distribution channels and products that complement a       
number of Danaher businesses in the tools, environmental and telecommunication  
testing industries. In addition, there exist opportunities to leverage          
manufacturing and purchasing between the companies. For additional information, 
see "The Merger--Reasons for the Merger; Recommendation of the Parties' Boards  
of Directors--Danaher."                                                         

OPINION OF FLUKE'S FINANCIAL ADVISOR                                            

 Salomon Smith Barney ("Salomon Smith Barney"), Fluke's financial advisor, has
delivered its written opinion, dated April 24, 1998, to the Fluke Board to the  
effect that, based upon the facts and circumstances as they existed as of the   
date thereof, and subject to certain assumptions and other considerations set   
forth in such opinion, as of the date thereof, the consideration to be received 
by Fluke Stockholders in the Merger was fair, from a financial point of view,   
to the Fluke Stockholders. The full text of the written opinion of Salomon      
Smith Barney, setting forth the assumptions made, matters considered and        
limitations on the review undertaken by Salomon Smith Barney, is attached as    
Annex B to this Proxy Statement/Prospectus and holders of Fluke Common Stock    
are urged to read carefully the opinion in its entirety. See "The Merger--      
Opinion of Fluke's Financial Advisor" for additional information.               

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

In considering the recommendation of the Fluke Board with respect to the    
Merger Agreement, Fluke Stockholders should be aware that certain officers and  
directors of Fluke (or their affiliates) have interests in the Merger that are  
different from and in addition to the interests of Fluke Stockholders           
generally. These interests include, but are not limited to, the fact that (i)   
all of the executive officers and all of the current non-employee directors of  
Fluke currently hold Stock Options, which, whether or not currently vested or   
exercisable, will be converted into Danaher Common Shares in the Merger based   
on the Exchange Ratio, (ii) the Merger will result in a change in control under 
the employment agreements and change in control agreements of certain executive 
officers of Fluke, including William Parzybok, some of whom will be receiving   
significant cash payments as a result of the Merger, (iii) Danaher has agreed,  
from and after the Effective Time, to cause Fluke, as the surviving corporation 
(the "Surviving Corporation"), to indemnify present and former officers and     
directors of Fluke and has agreed to cause the Surviving Corporation to         
maintain in effect after the Effective Time, policies of directors' and         
officers' liability insurance, in each case in respect of acts, omissions or    
matters occurring prior to the Effective Time and subject to certain            
limitations, and (iv) Danaher has agreed, from and after the Effective Time, to 
cause the Surviving Corporation to honor various current Fluke employment       
arrangements and benefit plans. The Fluke Board was aware of these interests    
and took these interests into account in approving the Merger Agreement and the 
transactions contemplated thereby. See "The Merger--Interests of Certain        
Persons in the Merger" and "--Stockholders Support Agreements."                 

EXCHANGE PROCEDURES                                                             

If the Fluke Merger Proposal is approved and the Merger is consummated, as  
soon as practicable after the Effective Time, a letter of transmittal will be   
mailed or delivered to each Fluke Stockholder to be used in forwarding          
certificates evidencing such holder's shares of Fluke Common Stock for          
surrender and exchange for certificates evidencing Danaher Common Shares to     
which such holder has become entitled and, if applicable, cash in lieu of       
fractional Danaher Common Shares. After receipt of such letter of transmittal,  
each holder of certificates formerly representing shares of Fluke Common Stock  
should surrender such certificates to SunTrust Bank, Atlanta, the exchange      
agent for the Merger, pursuant to and in accordance with the instructions       
accompanying such letter of transmittal, and each holder will receive in        
exchange therefor certificates evidencing the whole number of Danaher Common    
Shares to which he is entitled and any cash which may be payable in lieu of     
fractional Danaher Common Shares. See "The Merger Agreement--Terms of the       
Merger." Such letter                                                            

6 

DEF 14A
16th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 16th
of transmittal will be accompanied by instructions specifying other details of  
the exchange. FLUKE STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL    
THEY RECEIVE A LETTER OF TRANSMITTAL.                                           

STOCK OPTION AGREEMENT                                                          

In connection with the execution of the Merger Agreement, Danaher and Fluke 
entered into the Stock Option Agreement, dated April 24, 1998 (the "Stock       
Option Agreement"), filed as an exhibit to the Registration Statement of which  
this Proxy Statement/Prospectus forms a part, pursuant to which Fluke has       
granted to Danaher an option (the "Option") to purchase up to 3,636,874 shares  
of Fluke Common Stock (or 19.9% of the outstanding shares of Fluke Common Stock 
as of the Record Date, without including any shares subject to or issued        
pursuant to the Option) at an exercise price of $34.00 per share. The Option is 
exercisable upon the occurrence of certain events and provides Danaher with the 
right, under certain circumstances, to require Fluke to repurchase the Option   
for its in-the-money value, provided that the sum of the Termination Fee, the   
Expense Fee and the Option repurchase price shall not exceed $20 million. The   
Option, which Danaher required that Fluke grant as a condition to Danaher's     
entering into the Merger Agreement, may increase the likelihood of consummation 
of the Merger. See "The Merger--Stock Option Agreement" and "The Merger         
Agreement--Amendment; Termination; Expenses."                                   

STOCKHOLDERS SUPPORT AGREEMENTS                                                 

 Concurrently with the execution of the Merger Agreement, certain stockholders
of Fluke (including certain executive officers and directors of Fluke and       
certain of their affiliates), who as of the Record Date beneficially owned in   
the aggregate 11.3% of the outstanding Fluke Common Stock (each, a "Supporting  
Stockholder" and together, the "Supporting Stockholders"), executed             
Stockholders Support Agreements with Danaher, which are filed as exhibits to    
the Registration Statement of which this Proxy Statement/Prospectus forms a     
part (the "Stockholders Support Agreements"), pursuant to which each Supporting 
Stockholder agreed, among other things, to vote or direct the vote of all       
shares of Fluke Common Stock beneficially owned by the Supporting Stockholder,  
to approve the Merger and the Merger Agreement. Each Supporting Stockholder     
also agreed, among other things, to not sell or otherwise transfer any shares   
of Fluke Common Stock, other than pursuant to the Merger, without Danaher's     
prior written consent or solicit, initiate, encourage or facilitate, or furnish 
or disclose nonpublic information in furtherance of, any inquiries or the       
making of any proposal with respect to any recapitalization, merger,            
consolidation or other business combination involving Fluke, or acquisition of  
any capital stock or any material portion of the assets of Fluke, or any        
combination of the foregoing (a "Competing Transaction"), or negotiate, explore 
or otherwise engage in discussions with any person (other than as specified     
therein) with respect to any Competing Transaction or enter into any agreement, 
arrangement, or understanding with respect to any Competing Transaction or      
agree to or otherwise assist in the effectuation of any Competing Transaction;  
provided, however, that nothing in any Stockholders Support Agreement prevents  
any Supporting Stockholder from taking any action or omitting to take any       
action as a member of the Fluke Board to the extent permitted under certain     
provisions of the Merger Agreement. The Stockholders Support Agreements also    
contain certain agreements on the part of the Supporting Stockholders not to    
compete with Fluke. Each Stockholders Support Agreement will terminate          
automatically upon the termination of the Merger Agreement. See "The Merger--   
Stockholders Support Agreements."                                               

AMENDMENTS TO RETENTION AGREEMENTS                                              

In connection with the Merger Agreement, employment agreements between Fluke
and certain of its executive officers were amended to prevent the triggering of 
change of control provisions in those agreements. Certain employment            
agreements, which included noncompete agreements which terminate upon a change  
of control (which would include the Merger), were also amended to provide that  
certain employees would not compete with Fluke following its acquisition by     
Danaher. See "The Merger--Amendments to Retention Agreements."                  

7 

DEF 14A
17th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 17th
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

Fluke has received an opinion from Davis Wright Tremaine and Danaher has    
received an opinion from Wachtell, Lipton, Rosen & Katz to the effect that if   
the Merger is consummated in accordance with the terms of the Merger Agreement, 
no gain or loss will be recognized by Fluke or the Fluke Stockholders who do    
not exercise dissenter's rights (except, in the case of such holders, for gain  
or loss recognized on account of cash received in lieu of fractional Danaher    
Common Shares) for federal income tax purposes. These opinions are based upon   
and are subject to, among other things, customary representations to be made to 
Davis Wright Tremaine and Wachtell, Lipton, Rosen & Katz. See "Certain Federal  
Income Tax Consequences."                                                       

COMPARISON OF STOCKHOLDER RIGHTS

As a result of the Merger, shares of Fluke Common Stock, which are issued by
a Washington corporation, will be converted into the right to receive Danaher   
Common Shares, which are issued by a Delaware corporation. There are            
differences between the rights of Fluke Stockholders and the rights of holders  
of Danaher Common Shares ("Danaher Stockholders"). These differences result     
from (i) differences between Washington and Delaware law, and (ii) differences  
between the governing instruments of Fluke and Danaher. For a discussion of the 
various differences between the rights of Fluke Stockholders and Danaher        
Stockholders, see "Comparison of Stockholder Rights."                           

AMENDMENT TO FLUKE RIGHTS PLAN

In connection with the execution of the Merger Agreement, Fluke amended the 
Rights Agreement, dated July 11, 1988, between Fluke and Continental Stock      
Transfer & Trust Company (the "Fluke Rights Agreement") so that the entering    
into of the Merger Agreement, the Stockholders Support Agreements and the Stock 
Option Agreement and the consummation of the Merger and the other transactions  
contemplated thereby do not and will not result in the ability of any person to 
exercise any Rights (as defined therein) under the Fluke Rights Agreement or    
enable or require the Rights to be separated from the shares of Fluke Common    
Stock to which they are attached or to be triggered or become exercisable, and  
so that the Fluke Rights Agreement and the Rights will terminate upon           
consummation of the Merger.                                                     

CERTAIN SIGNIFICANT CONSIDERATIONS

In considering whether to vote in favor of approval of the Merger Agreement,
Fluke Stockholders should consider the following: (i) the value to be received  
in exchange for each share of Fluke Common Stock in the Merger will be          
determined by the value of Danaher Common Shares at the Effective Time; (ii)    
the price of Danaher Common Shares at the Effective Time can be expected to     
vary from its price as of the date of this Proxy Statement/Prospectus and the   
date on which the Fluke Stockholders vote on the Merger Agreement due to        
changes in the business, operations or prospects of Danaher, market assessments 
of the likelihood that the Merger will be consummated and the timing thereof,   
general market and economic conditions, and other factors; and (iii) if the     
Average Closing Price (as hereinafter defined) of Danaher Common Shares shall   
be less than $31.94 (and, as a result, the value of each share of Fluke Common  
Stock exchanged in the Merger shall be less than $28.90), Fluke may (subject to 
Danaher's right to increase the Exchange Ratio), but is not obligated to,       
terminate the Merger Agreement. Fluke Stockholders should also consider that by 
approving the Merger Agreement, Fluke Stockholders would be permitting the      
Fluke Board to determine, in the exercise of its fiduciary duties, to proceed   
with the Merger even though the value received per share of Fluke Common Stock  
is less than $28.90 because the Average Closing Price is below $31.94.          

8 

DEF 14A
18th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 18th
SUMMARY HISTORICAL AND UNAUDITED PRO
FORMA FINANCIAL INFORMATION 

FLUKE SUMMARY HISTORICAL FINANCIAL INFORMATION                                  

The summary historical financial information of Fluke set forth below for   
each of the years in the four-year period ended April 25, 1997, the seven       
months ended April 30, 1993, and the year ended September 25, 1992, has been    
derived from the historical financial statements of Fluke. The summary          
historical financial information for Fluke for the three quarters ended January 
23, 1998 and January 24, 1997 has been obtained from the unaudited financial    
statements of Fluke which, in the opinion of management of Fluke, include all   
adjustments of a normal and recurring nature which are necessary to present     
fairly the information for such periods. Such financial information should be   
read in conjunction with the financial statements of Fluke and other financial  
information incorporated by reference in this Proxy Statement/Prospectus. See   
"Incorporation of Certain Documents by Reference."                              

                                                        [Enlarge/Download Table]

                         FISCAL YEAR SEVEN MONTHS          FISCAL YEAR ENDED          NINE MONTHS ENDED
                            ENDED       ENDED     ----------------------------------- -----------------
                          SEPTEMBER     APRIL      APRIL    APRIL    APRIL    APRIL   JANUARY  JANUARY 
                          25, 1992   30, 1993(1)  29, 1994 28, 1995 26, 1996 25, 1997 24, 1997 23, 1998
                         ----------- ------------ -------- -------- -------- -------- -------- --------
                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)                     
                                                                                                       
EARNINGS STATEMENT DATA                                                                                
Net Revenues............  $271,819     $132,139   $357,904 $382,066 $413,525 $430,166 $315,077 $325,945
Net Earnings before                                                                                    
 cumulative effect of                                                                                  
 change in accounting                                                                                  
 principles.............    14,655        2,953      8,628   16,787   23,703   19,606   19,385   21,579
Earnings per share                                                                                     
 before cumulative                                                                                     
 effect of change in                                                                                   
 accounting principles:                                                                                
 Diluted................      0.96         0.19       0.50     0.98     1.34     1.08     1.09     1.14
 Basic..................      1.06         0.21       0.51     1.00     1.38     1.12     1.12     1.18
Cash Dividends declared                                                                                
 per share..............      0.24         0.13       0.26     0.28     0.30     0.32     0.24     0.26
BALANCE SHEET DATA                                                                                     
Total Assets............   175,889      172,129    244,648  274,907  275,672  292,360  281,657  304,158
Total Debt..............       391           34     14,712   21,613    7,098      563    3,600      772
Stockholders' Equity....   128,826      134,207    156,048  174,678  192,077  202,939  205,472  222,338

Notes:                                                                          

(1) 1993 was a seven-month stub period created by the change of the fiscal  
year from the last Friday in September. 1993 included two changes in accounting 
principles:                                                                     

a. Change in the method of applying overhead costs to inventory         

b. Adoption of Statement of Financial Accounting Standards No. 109,     
"Accounting for Income Taxes"                                               

 (2) Earnings per share data has been retroactively restated to reflect a two-
for-one stock split on October 15, 1997 and the adoption of Statement of        
Financial Accounting Standards No. 128, "Earnings per Share". The adoption of   
the standard did not change previously reported earnings per share as compared  
to diluted earnings per share determined based on FAS No. 128.                  

9 

DEF 14A
19th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 19th
DANAHER SUMMARY HISTORICAL FINANCIAL INFORMATION                                

The summary historical financial information of Danaher set forth below has 
been derived from and should be read in conjunction with the audited financial  
statements and other financial information incorporated by reference in this    
Proxy Statement/Prospectus. See "Incorporation of Certain Documents by          
Reference."                                                                     

                                                        [Enlarge/Download Table]

                                     FISCAL YEAR ENDED DECEMBER 31,             THREE MONTHS ENDED  
                          ---------------------------------------------------- ---------------------
                                                                               MARCH 28,  MARCH 27, 
                            1993      1994       1995       1996       1997       1997       1998   
                          -------- ---------- ---------- ---------- ---------- ---------- ----------
                                            (IN THOUSANDS, EXCEPT PER SHARE DATA)                   
                                                                                                    
EARNINGS STATEMENT DATA:                                                                            
Net Revenues              $937,633 $1,113,973 $1,486,769 $1,811,878 $2,050,968 $  466,441 $  534,418
Net Earnings before                                                                                 
 cumulative effect of                                                                               
 change in accounting                                                                               
 principles                                                                                         
 --Continuing                                                                                       
  Operations............    48,030     72,319    105,766    127,959    154,806     31,535     38,044
 --Discontinued                                                                                     
  Operations............     5,719      9,331      2,550     79,811        --         --         -- 
 --Total................    53,749     81,650    108,316    207,770    154,806     31,535     38,044
Earnings per share                                                                                  
 before cumulative                                                                                  
 effect of change in                                                                                
 accounting principles                                                                              
 --Continuing Operations                                                                            
 Diluted................  $   0.42 $     0.62 $     0.88 $     1.07 $     1.28 $     0.26 $     0.31
 Basic..................  $   0.42 $     0.63       0.90 $     1.09 $     1.32 $     0.27 $     0.32
 --Discontinued                                                                                     
  Operations                                                                                        
 Diluted................  $   0.05 $     0.08 $     0.02 $     0.67        --         --         -- 
 Basic..................  $   0.05 $     0.08 $     0.02 $     0.68        --         --         -- 
 --Total                                                                                            
 Diluted................  $   0.47 $     0.70 $     0.90 $     1.73 $     1.28 $     0.26 $     0.31
 Basic..................  $   0.47 $     0.71 $     0.92 $     1.77 $     1.32 $     0.27 $     0.32
Cash Dividends declared                                                                             
 per share..............  $   0.03 $     0.03 $     0.04 $     0.05 $     0.05 $     0.01 $     0.01
BALANCE SHEET DATA:                                                                                 
Total Assets............   872,472  1,105,645  1,485,991  1,765,074  1,879,717  1,794,658  2,370,725
Total Debt..............   133,585    185,286    283,587    236,327    198,247    209,364    527,605
Shareholders' Equity....   363,666    476,100    586,311    800,261    916,881    817,463    957,983

10

DEF 14A
20th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 20th
UNAUDITED PRO FORMA COMBINED SUMMARY FINANCIAL INFORMATION

 The unaudited pro forma combined summary financial information of Danaher and
Fluke set forth below gives effect to the Merger under the pooling-of-interests 
accounting method, and assumes that the Merger had occurred at the beginning of 
the periods presented for the earnings statement data. The pro forma            
information is presented in accordance with Danaher's fiscal year which ends    
December 31, and Fluke's balances for twelve month periods ending approximately 
one month later than the Danaher periods. The pro forma information is          
presented for illustrative purposes only and is not necessarily indicative of   
the operating results or financial position that would have occurred if the     
Merger had been consummated at such time, nor is it necessarily indicative of   
future operating results or financial position. The unaudited pro forma         
combined summary financial information should be read in conjunction with the   
"Unaudited Pro Forma Combined Financial Information" included elsewhere in this 
Proxy Statement/Prospectus.                                                     

                                                                [Download Table]

                                                      FISCAL YEAR ENDED        
                                                         DECEMBER 31,          
                                               --------------------------------
                                                  1995       1996       1997   
                                               ---------- ---------- ----------
                                               (IN THOUSANDS, EXCEPT PER SHARE 
                                                            DATA)              
                                                                               
EARNINGS STATEMENT DATA:                                                       
Net Revenues.................................. $1,899,463 $2,233,193 $2,492,002
Net Earnings                                                                   
  --Continuing Operations..................... $  128,289 $  154,357 $  176,606
  --Discontinued Operations...................      2,550     79,811        -- 
                                               ---------- ---------- ----------
  --Total..................................... $  130,839 $  234,168 $  176,606
                                               ========== ========== ==========
Earnings per share                                                             
  --Continuing Operations                                                      
    Diluted................................... $     0.95 $     1.13 $     1.28
    Basic..................................... $     0.97 $     1.16 $     1.32
  --Discontinued Operations                                                    
    Diluted................................... $     0.02 $     0.59        -- 
    Basic..................................... $     0.02 $     0.60        -- 
  --Total                                                                      
    Diluted................................... $     0.96 $     1.72 $     1.28
    Basic..................................... $     0.99 $     1.76 $     1.32
Cash Dividends declared per share............. $     0.07 $     0.08 $     0.09
BALANCE SHEET DATA:                                                            
Total Assets.................................. $1,755,978 $2,046,731 $2,183,875
Total Debt....................................    294,547    239,927    199,019
Shareholders' Equity..........................    772,874  1,005,733  1,114,219
Average Shares--Diluted.......................    135,685    136,124    137,731
Average Shares--Basic.........................    132,772    132,951    134,000

11

DEF 14A
21st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 21st
COMPARATIVE PER SHARE DATA

Set forth below are earnings, cash dividends declared and book value per    
share data for Danaher and Fluke on both historical and pro forma combined      
bases and on a per share equivalent pro forma basis for Fluke. Pro forma        
combined earnings per share are derived from the Unaudited Pro Forma Combined   
Financial Information presented elsewhere in this Proxy Statement/Prospectus,   
which gives effect to the Merger under the pooling-of-interests accounting      
method. Book value per share for the pro forma combined presentation is based   
upon outstanding Danaher Common Shares, adjusted to include Danaher Common      
Shares to be issued in the Merger for outstanding shares of Fluke Common Stock  
and outstanding Fluke Options at the Effective Time. The per share equivalent   
pro forma combined data for shares of Fluke Common Stock is based on the        
assumed conversion of each share of Fluke Common Stock into 0.90478 Danaher     
Common Shares. See "The Merger Agreement--Terms of the Merger." The information 
set forth below should be read in conjunction with the respective audited and   
unaudited financial statements of Danaher and Fluke incorporated by reference   
in this Proxy Statement/Prospectus and the "Unaudited Pro Forma Combined        
Financial Information" and the notes thereto presented elsewhere herein. See    
"Incorporation of Certain Documents by Reference."                              

                                                                [Download Table]

                                         AT OR FOR THE YEAR                     
                                         ENDED DECEMBER 31,  THREE MONTHS ENDED 
                                        -------------------- -------------------
                                                             MARCH 28, MARCH 27,
                                         1995   1996   1997    1997      1998   
                                        ------ ------ ------ --------- ---------
                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)  
                                                                                
FLUKE--HISTORICAL:                                                              
Earnings per share before cumulative                                            
 effect of change in accounting                                                 
 principles                                                                     
 --Continuing Operations                                                        
   Diluted............................  $ 1.28 $ 1.47 $ 1.15                    
   Basic..............................  $ 1.32 $ 1.52 $ 1.20                    
 --Total                                                                        
   Diluted............................  $ 1.28 $ 1.47 $ 1.15                    
   Basic..............................  $ 1.32 $ 1.52 $ 1.20                    
Cash Dividends declared per share.....  $ 0.30 $ 0.32 $ 0.35                    
Book Value per share..................  $10.55 $11.47 $11.68                    
DANAHER--HISTORICAL:                                                            
Earnings per share before cumulative                                            
 effect of change in accounting                                                 
 principles                                                                     
 --Continuing Operations                                                        
   Diluted............................  $ 0.88 $ 1.07 $ 1.28   $0.26     $0.31  
   Basic..............................  $ 0.90 $ 1.09 $ 1.32   $0.27     $0.32  
 --Discontinued Operations                                                      
   Diluted............................  $ 0.02 $ 0.67    --      --        --   
   Basic..............................  $ 0.02 $ 0.68    --      --        --   
 --Total                                                                        
   Diluted............................  $ 0.90 $ 1.73 $ 1.28   $0.26     $0.31  
   Basic..............................  $ 0.92 $ 1.77 $ 1.32   $0.27     $0.32  
Cash Dividends declared per share.....  $ 0.04 $ 0.05 $ 0.05   $0.01     $0.01  
Book Value per share..................  $ 4.90 $ 6.67 $ 7.61   $6.77     $7.90  
DANAHER & FLUKE--PRO FORMA COMBINED:                                            
Earnings per share before cumulative                                            
 effect of change in accounting                                                 
 principles                                                                     
 --Continuing Operations                                                        
   Diluted............................  $ 0.95 $ 1.13 $ 1.28                    
   Basic..............................  $ 0.97 $ 1.16 $ 1.32                    
 --Discontinued Operations                                                      
   Diluted............................  $ 0.02 $ 0.59    --                     
   Basic..............................  $ 0.02 $ 0.60    --                     
 --Total                                                                        
   Diluted............................  $ 0.96 $ 1.72 $ 1.28                    
   Basic..............................  $ 0.99 $ 1.76 $ 1.32                    
Cash Dividends declared per share.....  $ 0.07 $ 0.08 $ 0.09                    
Book Value per share..................  $ 5.69 $ 7.39 $ 8.27                    
EQUIVALENT PRO FORMA COMBINED PER                                               
 FLUKE SHARE:                                                                   
 --Continuing Operations                                                        
   Diluted............................  $ 0.86 $ 1.03 $ 1.16                    
   Basic..............................  $ 0.87 $ 1.05 $ 1.19                    
 --Discontinued Operations                                                      
   Diluted............................  $ 0.02 $ 0.53    --                     
   Basic..............................  $ 0.02 $ 0.54    --                     
 --Total                                                                        
   Diluted............................  $ 0.87 $ 1.56 $ 1.16                    
   Basic..............................  $ 0.89 $ 1.59 $ 1.19                    
Cash Dividends declared per share.....  $ 0.07 $ 0.07 $ 0.08                    
Book Value per share..................  $ 5.15 $ 6.68 $ 7.48                    

12

DEF 14A
22nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 22nd
MARKET PRICE AND DIVIDEND DATA

The following table reflects (i) the range of the reported high and low last
sale prices of Danaher Common Shares on the NYSE Composite Tape and the per     
share dividends paid thereon and (ii) the range of the reported high and low    
last sale prices of Fluke Common Stock on the NYSE Composite Tape and the per   
share dividends paid thereon, in each case for the calendar quarters indicated. 
The information in the table has been adjusted to reflect retroactively all     
applicable stock splits.                                                        

                                                        [Enlarge/Download Table]

                               DANAHER                            FLUKE                      
                            COMMON SHARES                      COMMON STOCK                  
                         -------------------                -------------------              
                          HIGH         LOW        DIVIDENDS  HIGH         LOW       DIVIDENDS
                         -------      ------      --------- ------       ------     ---------
                                                                                             
1996:                                                                                        
 First quarter..........    18 5/8       14 3/4     .01        19 1/16      17 1/4    .075   
 Second quarter.........    21 3/4       18 1/16    .01        20 3/16      18 3/4    .075   
 Third quarter..........    21 9/16      18 1/16    .0125      20 1/16      17 1/8    .08    
 Fourth quarter.........    23 5/16      20 1/4     .0125      22 7/8       18 9/16   .08    
1997:                                                                                        
 First quarter..........    25           20 13/16   .0125      24 5/16      22 3/16   .08    
 Second quarter.........    25 15/16     19 13/16   .0125      29 3/4       21 1/4    .08    
 Third quarter..........    29 7/32      24 29/32   .0125      29 1/8       24 1/8    .0875  
 Fourth quarter.........    31 7/8       26 23/32   .0125      27 13/32     22 9/16   .0875  
1998:                                                                                        
 First quarter..........    38 3/32      29 1/2     .0125      25 1/2       22 9/16   .0875  
 Second quarter (through                                                                     
  June 5, 1998).........    39 3/16      33 3/4       --       33 3/4       22 3/8    .0875  

 On April 24, 1998, the last full trading day prior to the execution, delivery
and public announcement of the Merger Agreement, the closing price of the       
Danaher Common Shares 36 29/32 per share and the closing price of the Fluke     
Common Stock was $23 3/16 per share, as reported on the NYSE Composite Tape.    
The value of Fluke Common Stock at April 24, 1998, on an equivalent per share   
basis, was $33.39 (assuming an Exchange Ratio of 0.90478). On June 5, 1998, the 
most recent practicable date prior to the mailing of this Proxy                 
Statement/Prospectus, the last sale prices of Danaher Common Shares and Fluke   
Common Stock were $35 15/16 per share and $32 1/16 per share, respectively, as  
reported on the NYSE Composite Tape. Fluke Stockholders are encouraged to       
obtain current market quotations for Danaher Common Shares and Fluke Common     
Stock.                                                                          

Danaher has applied for the listing on the NYSE of the Danaher Common Shares
to be issued in the Merger.                                                     

 Fluke has agreed in the Merger Agreement that it shall not declare or pay any
dividends other than the $0.0875 regular quarterly dividend payable to Fluke    
Stockholders of record as of April 24, 1998. In addition, Danaher and Fluke     
have agreed in the Merger Agreement to coordinate with one another regarding    
the declaration or payment of dividends in respect of Danaher Common Shares and 
Fluke Common Stock.                                                             

13

DEF 14A
23rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 23rd
THE FLUKE SPECIAL MEETING 

GENERAL                                                                         

This Proxy Statement/Prospectus is being furnished to Fluke Stockholders in 
connection with the solicitation of proxies by the Fluke Board for use at the   
Fluke Special Meeting to be held on July 7, 1998, at Fluke Park, 6920 Seaway    
Boulevard, Everett, WA 98203, commencing at 1:00 p.m., Pacific Time, and at     
any adjournment or postponement thereof.                                        

This Proxy Statement/Prospectus, the Letter to Fluke Stockholders, the      
Notice of the Fluke Special Meeting and the form of proxy for use at the Fluke  
Special Meeting are first being mailed to Fluke Stockholders on or about June   
8, 1998.                                                                        

MATTERS TO BE CONSIDERED AT THE FLUKE SPECIAL MEETING                           

At the Fluke Special Meeting, Fluke Stockholders will consider and vote on: 

1. The Fluke Merger Proposal, which is a proposal to approve the Merger 
Agreement pursuant to which, among other things, (i) Sub will be merged     
with and into Fluke with the result that Fluke becomes a wholly owned       
subsidiary of Danaher, and (ii) each outstanding share (other than shares   
held in the treasury of Fluke, if any, which will be canceled, or any       
Dissenting Shares) of Fluke Common Stock will be converted into a number of 
Danaher Common Shares equal to the Exchange Ratio as set forth in the       
Merger Agreement. A copy of the Merger Agreement is attached as Annex A to  
this Proxy Statement/Prospectus.                                            

2. Such other business as may properly come before the Fluke Special    
Meeting.                                                                    

RECORD DATE; VOTE REQUIRED; VOTING AT THE MEETING                               

The Fluke Board has fixed June 5, 1998, as the Record Date for determination
of Fluke Stockholders entitled to notice of and to vote at the Fluke Special    
Meeting. Accordingly, only holders of Fluke Common Stock of record at the       
close of business on June 5, 1998, will be entitled to notice of and to vote    
at the Fluke Special Meeting. Each holder of record of Fluke Common Stock at    
the close of business on the Record Date is entitled to cast one vote per       
share, exercisable in person or by a properly executed proxy, at the Fluke      
Special Meeting. As of the Record Date, there were 18,389,535 shares of Fluke   
Common Stock outstanding and entitled to vote which were held by approximately  
1,574 holders of record.                                                        

Pursuant to Fluke's Articles of Incorporation, as amended (the "Fluke       
Articles"), its Bylaws (the "Fluke Bylaws") and applicable law, the             
affirmative vote of the holders of 66 2/3% of the shares of Fluke Common Stock  
outstanding and entitled to vote thereon is required to approve the Fluke       
Merger Proposal. As of the Record Date, the directors and executive officers    
of Fluke and certain of their affiliates may be deemed to be beneficial owners  
of 11.7% of the outstanding shares of Fluke Common Stock and each such person   
has advised Fluke that such person intends to vote in favor of the Fluke        
Merger Proposal. In addition, certain stockholders of Fluke (including certain  
directors and executive officers of Fluke and certain of their affiliates),     
who as of the Record Date beneficially owned in the aggregate approximately     
11.3% of the outstanding Fluke Common Stock, have each agreed in the            
Stockholders Support Agreements to vote or direct the vote of all Fluke Common  
Stock over which such person has voting control in favor of the Fluke Merger    
Proposal.                                                                       

VOTING OF PROXIES                                                               

All Fluke Stockholders who are entitled to vote and are represented at the  
Fluke Special Meeting by properly executed proxies received prior to or at      
such meeting and not revoked will be voted at such meeting in accordance with   
the instructions indicated in such proxies. If no instructions are indicated,   
such proxies will be voted FOR approval of the Fluke Merger Proposal.           

If any other matters are properly presented at the Fluke Special Meeting for
consideration, including, among other things, consideration of a motion to      
adjourn such meeting to another time or place (including, without               

14  

DEF 14A
24th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 24th
limitation, for the purpose of soliciting additional proxies), the persons      
named in the enclosed form of proxy, and acting thereunder, will have           
discretion to vote on such matters in accordance with their best judgment       
(unless authorization to use such discretion is withheld). Fluke is not aware   
of any matters expected to be presented at the meeting other than as described  
in its Notice of Special Meeting.                                               

Any Fluke Stockholder returning a proxy has the power to revoke it at any   
time before shares of Fluke Common Stock represented by the proxy are voted at  
the meeting. A Fluke Stockholder may also revoke his proxy by attending the     
meeting and voting at the meeting. Any shares of Fluke Common Stock             
represented by an unrevoked proxy will be voted unless the stockholder attends  
the meeting and votes in person. A Fluke Stockholder's right to revoke his      
proxy is not limited by or subject to compliance with a specified formal        
procedure, but written notice should be given to the Corporate Secretary of     
Fluke at or before the meeting so that the number of shares represented by      
proxy can be appropriately adjusted.                                            

Pursuant to applicable law, abstaining votes will not be counted in favor of
the Fluke Merger Proposal. Shares of Fluke Common Stock represented by proxies  
returned by a broker holding such shares in nominee or "street" name will be    
counted for purposes of determining whether a quorum exists, even if such       
shares are not voted in matters where discretionary voting by the broker is     
not allowed ("broker non-votes"). Since the Fluke Merger Proposal requires the  
affirmative vote of 66 2/3% of the outstanding Fluke Common Stock, abstentions  
and broker non-votes will have the same effect as votes against such proposal.  

SOLICITATION OF PROXIES                                                         

The expenses of the solicitations for the Fluke Special Meeting, including  
the cost of printing and distributing this Proxy Statement/Prospectus and the   
form of proxy, will be borne by Fluke, subject to each party's obligation to    
reimburse the other for its expenses under certain circumstances. See "The      
Merger Agreement--Amendment; Termination; Expenses." In addition to             
solicitation by mail, proxies may be solicited by directors, officers and       
employees of Fluke in person or by telephone, telegram or other means of        
communication. These persons will receive no additional compensation for        
solicitation of proxies, but may be reimbursed for reasonable out-of-pocket     
expenses in connection with such solicitation. Fluke has retained D.F. King &   
Co., Inc. at an estimated cost of $5,000, plus reimbursement of expenses, to    
assist in its solicitation of proxies from brokers, nominees, institutions and  
individuals. Arrangements will also be made by Fluke with custodians, nominees  
and fiduciaries for forwarding of proxy solicitation materials to beneficial    
owners of shares held of record by such custodians, nominees and fiduciaries,   
and Fluke will reimburse such custodians, nominees and fiduciaries for          
reasonable expenses incurred in connection therewith.                           

APPRAISAL RIGHTS                                                                

Holders of Fluke Common Stock will be entitled to dissenters' appraisal     
rights under Washington law. See "Appraisal Rights" and "Comparison of          
Stockholder Rights--Appraisal or Dissenters' Rights."                           

15  

DEF 14A
25th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 25th
THE MERGER  

BACKGROUND OF THE MERGER                                                        

On March 9, 1998, William Parzybok, Chairman of the Board and Chief         
Executive Officer of Fluke was phoned by George Sherman, Chief Executive        
Officer and President of Danaher to explore a possible acquisition of Fluke by  
Danaher. A meeting was set up on March 19, 1998 between Mr. Parzybok and Mr.    
Sherman to discuss the potential advantages of such a proposal. Mr. Parzybok    
informed the members of the Executive Committee of the Fluke Board of these     
discussions. Salomon Smith Barney, which was engaged by Fluke on January 8,     
1998, was then informed of these discussions and was requested to begin         
preparing an analysis of Danaher.                                               

A second meeting was then held on March 27, 1998 which included Mr.         
Parzybok, David Katri, President and Chief Operating Officer, Elizabeth         
Huebner, Vice President and Chief Financial Officer and Douglas McKnight, Vice  
President, General Counsel and Corporate Secretary of Fluke and Mr. Sherman     
and Patrick Allender, Senior Vice President and Chief Financial Officer of      
Danaher. The participants at this meeting discussed the Danaher operating and   
financial strategy in more detail and how Fluke might fit into this strategy.   

On March 30, 1998, the Fluke Board met and were informed of the discussions 
with Danaher. Fluke management updated the Board about the current operating    
situation and the projected operating results for the next few years. Salomon   
Smith Barney reviewed public information related to Danaher and discussed a     
preliminary review of the valuation of Fluke Common Stock. The Fluke Board      
authorized management to continue discussions with Danaher after the signing    
of a non-disclosure agreement.                                                  

On April 2, 1998, a non-disclosure agreement (the "Non-Disclosure           
Agreement") with a standstill provision was executed and the parties began the  
process of due diligence. During the week of April 6, 1998, representatives of  
Fluke presented Fluke's business and financial plans to representatives of      
Danaher. Likewise representatives of Danaher presented Danaher's business and   
financial plans to representatives of Fluke and Salomon Smith Barney.           

On April 13 and 14, 1998, representatives of Fluke, including Messrs.       
Parzybok, Katri, McKnight and Ms. Huebner, and Mr. Adams, Vice President,       
Manufacturing, Mr. Rowan, Senior Vice President, General Manager, Fluke         
Networks, and Mr. Van Saun, Senior Vice President, General Manager, Industrial  
Group, met with representatives of Danaher, including Messrs. Sherman and       
Allender, to summarize the discussions between the parties during the prior     
week, to review the longer term strategic plans of Fluke and to develop a       
valuation of Fluke's business.                                                  

On April 14 and 15, 1998, the Executive Committee of the Danaher Board      
reviewed the status of discussions between the parties and discussed the        
general terms of a possible proposal for a business combination with Fluke.     

On April 16, 1998, the Fluke Board held a special meeting and were informed 
of the general terms of the Danaher proposal. The Fluke Board reviewed the      
general terms proposed by Danaher and authorized management to negotiate the    
terms of a business combination within specified parameters and to proceed      
with the negotiation of a merger document.                                      

Representatives of Danaher and Fluke and their advisors continued to meet   
during this period to discuss due diligence, scheduling and retention issues.   
During this period the financial advisors of the parties also discussed         
valuation issues, including whether the transaction would be structured with a  
fixed exchange ratio with or without a collar range, whether there would be a   
walkaway right if the market price of Danaher stock falls below certain         
levels, whether a stock option right would be granted to Danaher and the        
appropriate level of break-up fees which would be payable by Fluke to Danaher   
under certain circumstances if the acquisition transaction were not to close.   
They also discussed the retention plans for certain Fluke officers and the      
proposed communications to employees and the investment community following     
the possible announcement of the acquisition.                                   

16  

DEF 14A
26th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 26th
On April 20, 1998, the Danaher Board held a special meeting to discuss the  
status of discussions between Fluke and Danaher and approved the general terms  
of a proposal for a business combination with Fluke. The Danaher Board also     
authorized the Executive Committee and management to negotiate the final terms  
of the offer and proceed with the negotiation of a merger document.             

On April 20 through April 23, 1998, representatives from Danaher and Fluke, 
as well as their respective counsels, negotiated and finalized the terms of     
the Merger Agreement and the Stock Option Agreement. Representatives of         
Danaher also negotiated the terms of the Stockholders Support Agreements        
during this time with certain members of Fluke's management and other Fluke     
Stockholders.                                                                   

On April 24, 1998, the Fluke Board reviewed the final terms and conditions  
of the proposed transaction with Danaher. At the meeting, legal counsel for     
Fluke advised the Fluke Board on the final terms of the definitive agreements,  
the results of the legal diligence of Danaher, and the responsibilities of the  
Fluke Board. Salomon Smith Barney then made a financial presentation in         
respect of the proposed Merger and rendered to the Fluke Board its oral         
opinion (which opinion was subsequently confirmed by delivery of a written      
opinion dated April 24, 1998) to the effect that, as of such date and based     
upon and subject to certain matters stated in such opinion, the consideration   
to be received by the holders of Fluke Common Stock in the Merger was fair,     
from a financial point of view, to such stockholders. See "--Opinion of         
Fluke's Financial Advisor." After discussion, the Fluke Board unanimously       
approved the terms of the Merger Agreement and directed the officers of Fluke   
to finalize and execute the Merger Agreement.                                   

On April 24, 1998, the Executive Committee of the Danaher Board reviewed and
approved the final terms and conditions of the transaction. The Executive       
Committee of the Danaher Board authorized certain officers of Danaher to        
finalize and to execute the Merger Agreement.                                   

The definitive Merger Agreement was executed on behalf of Danaher, Fluke and
Sub after the close of the stock market on April 24, 1998, along with the       
Stock Option Agreements and the two Stockholders Support Agreements and was     
publicly announced before the commencement of the business day on April 27,     
1998.                                                                           

REASONS FOR THE MERGER; RECOMMENDATION OF THE PARTIES' BOARDS OF DIRECTORS      

Fluke. The Fluke Board believes that the Merger is fair to and in the best  
interests of Fluke and Fluke Stockholders, and the Fluke Board has unanimously  
approved the Merger Agreement. The following are among the reasons the Fluke    
Board believes the Merger will be beneficial to Fluke and Fluke Stockholders:   

-- The Merger is expected to provide Fluke Stockholders with Danaher    
Common Shares at a significant premium over the market price for shares of  
Fluke Common Stock prevailing prior to the public announcement of the       
Merger in a tax-free exchange.                                              

-- Such premium is especially significant considering Fluke's expected  
decline in earnings for the fourth quarter of fiscal year 1998, ended on    
April 24, 1998.                                                             

-- The fixed Exchange Ratio will allow Fluke Stockholders to share fully
in any potential increases in the price of Danaher Common Shares.           

-- The Fluke Board reserved the right to terminate the Merger Agreement 
in the event that the price of Danaher Common Shares falls below a certain  
level thus ensuring that if the Merger goes forward, Fluke Stockholders     
will receive a guaranteed minimum value for their shares of Fluke Common    
Stock.                                                                      

-- The Merger should provide Fluke with greater resources to support its
marketing, distribution, product development and potential acquisition      
efforts.                                                                    

In addition to the factors set forth above, in the course of its            
deliberations concerning the Merger, the Fluke Board consulted with Fluke's     
legal and financial advisors as well as Fluke's management, and reviewed a      
number of other factors relevant to the Merger, including (i) reports from      
management and legal and financial advisors on specific terms of the Merger     
Agreement and ancillary transaction agreements referred to in the Agreement;    

17  

DEF 14A
27th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 27th
(ii) information concerning the financial performance, business operations and  
prospects of Danaher presented at meetings of the Fluke Board, including among  
other things, Danaher's recent and historical stock and earnings performance,   
and the ability of Danaher to implement successfully its growth strategy;       
(iii) Fluke's understanding that Fluke would operate as a wholly-owned          
subsidiary of Danaher after the Merger, with sufficient independence to         
continue to implement its business strategy; (iv) Fluke's belief that the       
corporate cultures of the two companies would be complementary; (v) the         
expected tax and accounting treatment of the Merger; (vi) financial             
presentations by Salomon Smith Barney and Salomon Smith Barney's opinion to     
the effect that, as of April 24, 1998 and based upon and subject to certain     
matters stated in such opinion, the consideration to be received by Fluke       
Stockholders in the Merger was fair, from a financial point of view, to the     
Fluke Stockholders; and (vii) the fact that the Merger Agreement would permit   
the Fluke Board to terminate the agreement under certain circumstances.         

The Fluke Board also considered a number of potentially negative factors in 
its deliberations concerning the Merger, including (i) the possibility of       
management disruption associated with the Merger and the risk that key          
technical and management personnel of Fluke might not continue with Fluke;      
(ii) the risks associated with obtaining necessary approvals of the Merger and  
the possibility that the Merger may not be consummated even if approved by      
Fluke Stockholders; (iii) the possibility that the Merger might adversely       
affect Fluke's relationship with certain of its customers; (iv) the             
possibility of a decline in the value of Danaher Common Shares; and (v) the     
risk that the potential benefits of the Merger might not be realized. The       
Fluke Board concluded, however, that the benefits of the transaction to Fluke   
and Fluke Stockholders outweighed the risks associated with the foregoing       
factors.                                                                        

The foregoing discussion of the information and factors considered by the   
Fluke Board in connection with its evaluation of the Merger is not intended to  
be exhaustive but is intended to include all of the material factors            
considered by the directors. In view of the wide variety of factors considered  
by the Fluke Board, the directors did not find it practical to, and did not,    
quantify or otherwise assign relative weights to the specific factors           
considered.                                                                     

AT A SPECIAL MEETING OF THE FLUKE BOARD HELD ON APRIL 24, 1998, THE FLUKE   
BOARD UNANIMOUSLY DETERMINED THAT THE MERGER IS FAIR TO AND IN THE BEST         
INTERESTS OF FLUKE AND FLUKE STOCKHOLDERS, UNANIMOUSLY APPROVED THE MERGER,     
AND UNANIMOUSLY RECOMMENDED APPROVAL OF THE MERGER AGREEMENT BY FLUKE           
STOCKHOLDERS.                                                                   

Danaher. The Danaher Board, in the course of reaching its decision to       
approve the Merger Agreement and the transactions contemplated thereby,         
considered a number of factors. Danaher's strategy has been to develop its      
businesses both internally and through selective acquisitions. Key attributes   
looked for in acquisition candidates include leading brands and market          
positions, strong international presence, above average growth prospects, and   
design, marketing and sales strengths that can be complemented by Danaher's     
manufacturing capabilities.                                                     

Utilizing these characteristics, Fluke had been identified by Danaher as an 
attractive company and potential acquisition candidate. Fluke has a leading     
brand in its business segment and broad geographic coverage, as well as         
distribution channels and products that complement a number of Danaher          
businesses in the tools, environmental and telecommunication testing            
industries. In addition, there exist opportunities to leverage manufacturing    
and purchasing between the companies.                                           

In addition to the factors set forth above, in the course of its            
deliberations concerning the Merger, the Danaher Board consulted with           
Danaher's legal and financial advisors as well as Danaher's management, and     
reviewed a number of other factors relevant to the Merger, including (i)        
reports from management and legal and financial advisors on specific terms of   
the Merger Agreement and ancillary transaction agreements referred to in the    
Merger Agreement; (ii) information concerning the financial performance,        
business operations and prospects of Fluke, including among other things,       
Fluke's recent and historical stock and earnings performance; (iii)             

18  

DEF 14A
28th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 28th
Danaher's belief that the corporate cultures of the two companies would be      
complementary; (iv) the expected tax and accounting treatment of the Merger;    
(v) the fact that a fixed Exchange Ratio provided certainty as to the maximum   
number of Danaher Common Shares which would be issued in the Merger, and the    
maximum degree of dilution; and (vi) the fact that Danaher had received         
commitments from certain key Fluke personnel to remain in the employ of the     
Surviving Company.                                                              

The foregoing discussion of the factors considered by the Danaher Board is  
not intended to be exhaustive. In view of the wide variety of factors           
considered in connection with its evaluation of the Merger, the Danaher Board   
did not find it practicable to, and did not, quantify or otherwise attempt to   
assign relative weights to the specific factors considered in reaching its      
determinations.                                                                 

OPINION OF FLUKE'S FINANCIAL ADVISOR                                            

Salomon Smith Barney was retained by Fluke to act as its financial advisor  
in connection with the proposed Merger. In connection with such engagement,     
Fluke requested that Salomon Smith Barney evaluate the fairness, from a         
financial point of view, to holders of Fluke Common Stock of the consideration  
to be received by such holders pursuant to the terms of the Merger Agreement.   
On April 24, 1998, at a meeting of the Fluke Board held to evaluate the         
Merger, Salomon Smith Barney delivered an oral opinion (subsequently confirmed  
by delivery of a written opinion dated April 24, 1998) to the Fluke Board to    
the effect that, as of the date of such opinion and based upon and subject to   
certain matters stated therein, the consideration to be received by Fluke       
Stockholders in the Merger was fair, from a financial point of view, to the     
holders of Fluke Common Stock.                                                  

In arriving at its opinion, Salomon Smith Barney reviewed a draft of the    
Merger Agreement and held discussions with certain senior officers, directors   
and other representatives and advisors of Fluke and certain senior officers     
and other representatives and advisors of Danaher concerning the businesses,    
operations and prospects of Fluke and Danaher. Salomon Smith Barney examined    
certain publicly available business and financial information relating to       
Fluke and Danaher as well as certain financial forecasts for Fluke and other    
information and data for Fluke and Danaher which were provided to or otherwise  
discussed with Salomon Smith Barney by the respective managements of Fluke and  
Danaher, including information relating to certain strategic implications and   
operational benefits, if any, anticipated to result from the Merger. Salomon    
Smith Barney reviewed the financial terms of the Merger as set forth in the     
Merger Agreement in relation to, among other things: (i) current and            
historical market prices and trading volumes of the Fluke Common Stock and      
Danaher Common Stock; (ii) the historical and projected earnings and other      
operating data of Fluke and Danaher; and (iii) the capitalization and           
financial condition of Fluke and Danaher. Salomon Smith Barney also             
considered, to the extent publicly available, the financial terms of certain    
other similar transactions recently effected which Salomon Smith Barney         
considered relevant in evaluating the Merger and analyzed certain financial,    
stock market and other publicly available information relating to the           
businesses of other companies whose operations Salomon Smith Barney considered  
relevant in evaluating those of Fluke and Danaher. Salomon Smith Barney also    
evaluated the potential pro forma financial impact of the Merger on Danaher.    
In addition to the foregoing, Salomon Smith Barney conducted such other         
analyses and examinations and considered such other financial, economic and     
market criteria as Salomon Smith Barney deemed appropriate in arriving at its   
opinion. Salomon Smith Barney noted that its opinion was necessarily based      
upon information available, and financial, stock market and other conditions    
and circumstances existing and disclosed to Salomon Smith Barney, as of the     
date of its opinion.                                                            

In rendering its opinion, Salomon Smith Barney assumed and relied, without  
independent verification, upon the accuracy and completeness of all financial   
and other information and data publicly available or furnished to or otherwise  
reviewed by or discussed with Salomon Smith Barney. Salomon Smith Barney also   
assumed, with the consent of the Fluke Board, that the final terms of the       
Merger Agreement reviewed by Salomon Smith Barney in draft form would not vary  
materially from the draft reviewed by Salomon Smith Barney. With respect to     
financial forecasts and other information and data furnished to or otherwise    
reviewed by or discussed with Salomon Smith Barney, the management of Fluke     
advised Salomon Smith Barney that such forecasts and other information and      
data were reasonably prepared on bases reflecting the best currently available  
estimates and                                                                   

19  

DEF 14A
29th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 29th
judgment of the management of Fluke as to the future financial performance of   
Fluke and Danaher and the strategic implications and operational benefits       
(including the amount, timing and achievability thereof), if any, anticipated   
to result from the Merger.                                                      

Salomon Smith Barney's opinion, as set forth therein, relates to the        
relative values of Fluke and Danaher. Salomon Smith Barney did not express any  
opinion as to what the value of the Danaher Common Stock actually will be when  
issued pursuant to the Merger or the price at which the Danaher Common Stock    
will trade subsequent to the consummation of the Merger. Salomon Smith Barney   
did not make and was not provided with an independent evaluation or appraisal   
of the assets or liabilities (contingent or otherwise) of Fluke or Danaher nor  
did Salomon Smith Barney make any physical inspection of the properties or      
assets of Fluke or Danaher. Salomon Smith Barney was not requested to and did   
not approach third parties or hold discussions with third parties to solicit    
indications of interest in the possible acquisition of Fluke. Salomon Smith     
Barney was not requested to consider, and Salomon Smith Barney's opinion does   
not address, the relative merits of the Merger as compared to any alternative   
business strategies that might exist for Fluke or the effect of any other       
transaction in which Fluke might engage. Although Salomon Smith Barney          
evaluated the consideration to be received by Fluke Stockholders in the Merger  
from a financial point of view, Salomon Smith Barney was not asked to and did   
not recommend the specific consideration payable in the Merger, which was       
determined through negotiation between Fluke and Danaher. No other limitations  
were imposed by Fluke on Salomon Smith Barney with respect to the               
investigations made or procedures followed by Salomon Smith Barney in           
rendering its opinion.                                                          

THE FULL TEXT OF THE WRITTEN OPINION OF SALOMON SMITH BARNEY DATED APRIL 24,
1998, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND             
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED HERETO AS ANNEX B AND SHOULD  
BE READ CAREFULLY IN ITS ENTIRETY. THE OPINION OF SALOMON SMITH BARNEY IS       
DIRECTED TO THE BOARD OF DIRECTORS OF FLUKE AND RELATES ONLY TO THE FAIRNESS    
OF THE CONSIDERATION TO BE RECEIVED BY FLUKE STOCKHOLDERS IN THE MERGER FROM A  
FINANCIAL POINT OF VIEW, DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER OR     
RELATED TRANSACTIONS AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY FLUKE      
STOCKHOLDER AS TO HOW SUCH FLUKE STOCKHOLDER SHOULD VOTE AT THE FLUKE SPECIAL   
MEETING. THE SUMMARY OF THE OPINION OF SALOMON SMITH BARNEY SET FORTH IN THIS   
PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE     
FULL TEXT OF SUCH OPINION.                                                      

In preparing its opinion to the Fluke Board, Salomon Smith Barney performed 
a variety of financial and comparative analyses, including those described      
below. The summary of such analyses does not purport to be a complete           
description of the analyses underlying Salomon Smith Barney's opinion. The      
preparation of a financial opinion is a complex analytic process involving      
various determinations as to the most appropriate and relevant methods of       
financial analyses and the application of those methods to the particular       
circumstances and, therefore, such an opinion is not readily susceptible to     
summary description. Accordingly, Salomon Smith Barney believes that its        
analyses must be considered as a whole and that selecting portions of its       
analyses and factors, without considering all analyses and factors, could       
create a misleading or incomplete view of the processes underlying such         
analyses and opinion. In its analyses, Salomon Smith Barney made numerous       
assumptions with respect to Fluke, Danaher, industry performance, general       
business, economic, market and financial conditions and other matters, many of  
which are beyond the control of Fluke and Danaher. The estimates contained in   
such analyses and the valuation ranges resulting from any particular analysis   
are not necessarily indicative of actual values or predictive of future         
results or values, which may be significantly more or less favorable than       
those suggested by such analyses. In addition, analyses relating to the value   
of businesses or securities do not purport to be appraisals or to reflect the   
prices at which businesses or securities actually may be sold. Accordingly,     
such analyses and estimates are inherently subject to substantial uncertainty.  
Salomon Smith Barney's opinion and financial analyses were only one of many     
factors considered by the Fluke Board in its evaluation of the Merger and       
should not be viewed as determinative of the views of the Fluke Board or        
management with respect to the consideration to be received by Fluke            
Stockholders in the Merger or the proposed Merger.                              

20  

DEF 14A
30th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 30th
The following is a summary of the material financial analyses performed by  
Salomon Smith Barney in connection with its opinion dated April 24, 1998:       

Selected Company Analysis. Using publicly available information, Salomon    
Smith Barney analyzed, among other things, the market values and trading        
multiples of Fluke and the following selected publicly traded companies in the  
electronic test tools industry, consisting of: (i) directly comparable          
companies in the electronic test tool industry, consisting of: Teradyne, Inc.,  
Tektronix, Inc., LeCroy Corp, IFR Systems, Inc., and Tollgrade Communications,  
Inc. (collectively, the "Direct Companies"); (ii) micro capitalization          
electronic test tool companies: Wireless Telecom Group, Inc., Keithley          
Instruments, Wandel & Goltermann Technologies, Microtest and Giga-Tronics Inc.  
(collectively, the "MicroCap Companies"); and (iii) indirectly comparable       
companies that are primarily focused in other industries: Genrad, Inc.,         
Hewlett Packard Co., Integrated Measurement Systems Inc. and National           
Instruments Corp. (collectively, the "Indirect Companies", and together with    
the Direct Companies and the MicroCap Companies, the "Selected Companies").     
With respect to the Selected Companies, Salomon Smith Barney focused primarily  
on the Direct Companies, which companies Salomon Smith Barney considered to be  
most similar to Fluke. Salomon Smith Barney compared market values as a         
multiple of, among other things, actual calendar year 1997 and estimated        
calendar years 1998 and 1999 earnings per share ("EPS"), and adjusted market    
values (market value, plus total debt, less cash, plus operating leases         
capitalized at 12.5%) as multiples of among other things, latest 12 months      
earnings before interest and taxes ("EBIT") and earnings before interest,       
taxes, depreciation and amortization ("EBITDA"). Salomon Smith Barney also      
compared the implied trading multiples for the combined company based on the    
trading multiples of the Direct Companies. All multiples were based on closing  
stock prices as of April 22, 1998. EPS estimates for the Selected Companies     
were obtained from reports published by the First Call Corporation, and EPS     
estimates for Fluke and Danaher were based on internal estimates of the         
managements of Fluke and Danaher. Applying a range of multiples for the Direct  
Companies of latest 12 months EBIT and EBITDA of 11.3x to 14.9x and 9.1x to     
11.8x, respectively, to corresponding financial data of Fluke resulted in an    
equity valuation range of $28.88 to $37.68 per share and $32.07 to $41.20 per   
share of Fluke Common Stock, on a fully diluted basis, as compared to an        
implied equity valuation of the consideration to be received by Fluke           
Stockholders in the Merger of $34.58 based on the closing price of Danaher      
Common Shares on April 22, 1998. Applying a range of multiples for the Direct   
Companies of actual calendar year 1997 EPS of 16.7x to 24.2x to corresponding   
financial data of Fluke resulted in an equity valuation range of $26.22 to      
$37.99 per share of Fluke Common Stock, on a fully diluted basis, as compared   
to an implied equity valuation of the consideration to be received by Fluke     
Stockholders in the Merger of $34.58 based on the closing price of Danaher      
Common Shares on April 22, 1998. Applying a range of multiples for the Direct   
Companies of estimated calendar years 1998 and 1999 EPS of 14.5x to 18.4x and   
11.9x to 14.8x, respectively, to corresponding financial data of Fluke          
resulted in an average equity valuation range of $21.97 to $27.60 per share of  
Fluke Common Stock, on a fully diluted basis, as compared to the implied        
equity valuation of the consideration to be received by Fluke Stockholders in   
the Merger of $34.58 based on the closing price of Danaher Common Shares on     
April 22, 1998.                                                                 

Selected Merger and Acquisition Transactions Analysis. Using publicly       
available information, Salomon Smith Barney analyzed the purchase price and     
implied transaction value multiples paid in the following selected              
transactions in the electronic test tools industry, consisting of               
(acquiror/target): WG Technologies, Inc./Wavetek Corp.; Aetrium Inc./WEB        
Technology Inc.; Clayton, Dubilier & Rice et. al./Dynatech Corporation;         
AMETEK/Chatillon and Lloyd (Technitrol); Fluke Corp./DeskNet Systems; KLA       
Instruments Corporation/Tencor Instruments; Dynatech Corp./Itronix (Texlon)     
Corp.; Fluke Corp ./Forte Networks; Teradyne Corp./Megatest Corporation;        
Dynatech Corp/Tele-Path Industries; Tektronix Inc./Microwave Logic; GN Great    
Nordic Ltd./Laser Precision Corp.; Snap-on Tools Corporation/Sun Electronic     
Corporation; and Torrey Investments Inc./Wavetek Corp. (collectively, the       
"Selected Transactions"). Salomon Smith Barney compared purchase prices in the  
Selected Transactions as a multiple of, among other things, latest 12 months    
net income, and transaction values as multiples of, among other things, latest  
12 months EBIT and EBITDA. All multiples for the Selected Transactions were     
based on information available at the time of announcement of the transaction.  
Applying the range of multiples for the Selected Transactions of latest 12      
months net income, EBIT and EBITDA of 20.1x to 22.5x, 11.4x to 17.4x and 9.8x   
to 11.9x, respectively, to corresponding financial data for Fluke resulted in   
an average valuation range of $31.71 to $40.22 per share of Fluke Common        
Stock, on a fully diluted                                                       

21  

DEF 14A
31st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 31st
basis, as compared to the implied equity valuation of the consideration to be   
received by Fluke Stockholders in the Merger of $34.58 based on the closing     
price of Danaher Common Shares on April 22, 1998.                               

No company, transaction or business used in the "Selected Company Analysis" 
or "Selected Merger and Acquisition Transactions Analysis" as a comparison is   
identical to Fluke, Danaher or the Merger. Accordingly, an analysis of the      
results of the foregoing is not entirely mathematical; rather, it involves      
complex considerations and judgments concerning differences in financial and    
operating characteristics and other factors that could affect the acquisition,  
public trading or other values of the Selected Companies, Selected              
Transactions or the business segment, company or transaction to which they are  
being compared.                                                                 

Contribution Analysis. Salomon Smith Barney analyzed the respective         
contributions of Fluke and Danaher to, among other things, the revenues, EBIT,  
EBITDA and net income of the combined company for the latest 12 months ended    
December 31, 1997 for Danaher and January 23, 1998 for Fluke and the estimated  
revenues, EBIT, EBITDA and net income of the combined company for calendar      
year 1998, based on internal estimates of the managements of Fluke and          
Danaher. This analysis indicated that (i) for the latest 12 months ended        
December 31, 1997 for Danaher and January 23, 1998 for Fluke, Fluke would have  
contributed approximately 17.2% of revenues, 15.4% of EBITDA, 14.4% of EBIT     
and 15.7% of net income, and Danaher would have contributed approximately       
82.8% of revenues, 84.6% of EBITDA, 85.6% of EBIT and 84.3% of net income; and  
(ii) in the estimated calendar year 1998, Fluke would have contributed          
approximately 15.9% of revenues, 14.7% of EBITDA, 12.6% of EBIT and 14.4% of    
net income, and Danaher would have contributed approximately 84.1% of           
revenues, 85.3% of EBITDA, 87.4% of EBIT and 85.6% of net income, of the        
combined company. Based on the consideration to be received by Fluke            
Stockholders in the Merger, current stockholders of Fluke and Danaher would     
own approximately 12.7% and 87.3%, respectively, of the equity value of the     
combined company upon consummation of the Merger, on a fully diluted basis,     
and Fluke and Danaher would constitute approximately 11.1% and 88.9%,           
respectively, of the enterprise value of the combined company, on a fully       
diluted basis.                                                                  

Discounted Cash Flow Analysis. Salomon Smith Barney performed a discounted  
cash flow analysis of the projected free cash flows of Fluke for fiscal years   
ended April 30, 1999 through 2003, based on internal estimates of the           
management of Fluke. The stand-alone discounted cash flow analyses of Fluke     
were determined by (i) adding (x) the present value of the projected free cash  
flows of Fluke over the five-year period from 1999 to 2003 and (y) the present  
value of the estimated terminal value of Fluke in year 2003 and (ii)            
subtracting the current net debt of Fluke. The range of estimated terminal      
value for Fluke at the end of the five-year period was calculated by applying   
terminal value multiples of 7.0x to 9.0x to the projected 2003 EBITDA of        
Fluke. The cash flows and terminal value of Fluke were discounted to present    
value using discount rates ranging from 13.0% to 15.0%. Utilizing such          
terminal multiples and discount rates, this analysis resulted in an equity      
reference range for Fluke of approximately $23.43 to $30.88 per share of Fluke  
Common Stock, as compared to the implied equity valuation of the consideration  
to be received by Fluke Stockholders in the Merger of $34.58 based on the       
closing price of Danaher Common Shares on April 22, 1998.                       

Pro Forma Merger Analysis. Salomon Smith Barney analyzed certain pro forma  
effects resulting from the Merger, including, among other things, the impact    
of the Merger on the projected EPS of Fluke for the calendar year 1998, based   
on internal estimates of the managements of Fluke. The results of the pro       
forma merger analysis suggested that the Merger would be accretive to the       
fully diluted EPS of Fluke and Danaher in calendar year 1998, both before and   
after giving effect to cost savings and other potential synergies, if any,      
anticipated by the management of Fluke to result from the Merger. The actual    
results achieved by the combined company may vary from projected results and    
the variations may be material.                                                 

Other Factors and Comparative Analyses. In rendering its opinion, Salomon   
Smith Barney considered certain other factors and conducted certain other       
comparative analyses, including, among other things, a review of (i)            
historical and projected financial results of Fluke and Danaher; (ii) the       
history of trading prices and volume for Fluke Common Stock and the             
relationship between movements in Fluke Common Stock and movements in the       
NASDAQ Composite Index; (iii) selected published analysts' reports on Fluke,    
including analysts' estimates as to the earnings growth potential of Fluke;     
and (iv) premiums paid in selected stock-for-stock transactions in the          
electronic test tool industry.                                                  

22  

DEF 14A
32nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 32nd
Pursuant to the terms of Salomon Smith Barney's engagement, Fluke has agreed
to pay Salomon Smith Barney for its services in connection with the Merger an   
aggregate financial advisory fee based on a percentage of the aggregate         
transaction value of the Merger. The fee payable to Salomon Smith Barney is     
currently estimated to be approximately $4,500,000. Fluke has also agreed to    
reimburse Salomon Smith Barney for travel and other out-of-pocket expenses      
incurred by Salomon Smith Barney in performing its services, including the      
fees and expenses of its legal counsel, and to indemnify Salomon Smith Barney   
and related persons against certain liabilities, including liabilities under    
the federal securities laws, arising out of Salomon Smith Barney's engagement.  
Salomon Smith Barney will receive greater compensation in the event that the    
Merger is completed than if it is not. Salomon Smith Barney has advised Fluke   
that, in the ordinary course of business, Salomon Smith Barney and its          
affiliates may actively trade or hold the securities of Fluke for their own     
account or for the account of customers and, accordingly, may at any time hold  
a long or short position in such securities.                                    

Salomon Smith Barney has in the past provided investment banking services to
Fluke and Danaher unrelated to the Merger, for which services Salomon Smith     
Barney has received compensation. In addition, Salomon Smith Barney and its     
affiliates (including Travelers Group Inc. and its affiliates) may maintain     
relationships with Fluke and Danaher. Salomon Smith Barney as an                
internationally recognized investment banking firm and was selected by Fluke    
based on its experience, expertise and familiarity with Fluke and its           
business. Salomon Smith Barney regularly engages in the valuation of            
businesses and their securities in connection with mergers and acquisitions,    
negotiated underwritings, competitive bids, secondary distributions of listed   
and unlisted securities, private placements and valuations for estate,          
corporate and other purposes.                                                   

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

In considering the recommendation of the Fluke Board with respect to the    
Merger Agreement, Fluke Stockholders should be aware that certain officers and  
directors of Fluke (or their affiliates) have interests in the Merger that are  
different from and in addition to the interests of Fluke Stockholders           
generally. The Fluke Board was aware of these interests and took these          
interests into account in approving the Merger Agreement and the transactions   
contemplated thereby.                                                           

Fluke Options. Fluke and Danaher shall take all necessary action to provide 
that, at the Effective Time, all Stock Options under any Stock Option Plans     
will be canceled and retired and shall cease to exist, and that each holder of  
a Stock Option, whether or not then exercisable, shall receive with respect to  
such Stock Option, without any action on the part of such holder, the number    
of Danaher Common Shares equal to (i) the Fair Value of such Stock Option       
divided by (ii) the Closing Danaher Stock Price, where: the "Fair Value of      
such Stock Option" is equal to the product of (x) the number of shares of       
Fluke Common Stock subject to such Stock Option and (y) the excess, if any, of  
(A) the product of the Exchange Ratio and the Closing Danaher Stock Price over  
(B) the exercise price of such Stock Option; and the "Closing Danaher Stock     
Price" means the average of the daily last sale prices of Danaher Common        
Shares as reported on the NYSE Composite Transactions reporting system (as      
reported in The Wall Street Journal or, if not reported therein, in another     
mutually agreed upon authoritative source) for the ten consecutive full         
trading days ending at the close of trading on the trading day immediately      
preceding the Closing Date.                                                     

As of the Record Date, 2,792,263 shares of Fluke Common Stock were issuable 
upon the exercise of outstanding Fluke Options, which options, assuming an      
Exchange Ratio of 0.90478 (and assuming a Closing Danaher Stock Price of $35    
15/16, the closing price of Danaher Common Stock on the NYSE on June 5, 1998),  
will be converted to become approximately 1,162,788 Danaher Common Shares in    
the aggregate. All of the executive officers and all of the current non-        
employee directors of Fluke currently hold Fluke Options which will become      
Danaher Common Shares.                                                          

Benefit Plans and Employee Matters. In the Merger Agreement, Danaher agreed 
that it will cause the Surviving Corporation to honor, in accordance with       
their respective terms as in effect on the date hereof, certain employment,     
severance and bonus agreements and arrangements to which Fluke is a party.      
Danaher intends to continue the Fluke Corporation Supplemental Retirement       
Plan, the Fluke Corporation Executive Deferred Compensation Plan and the Fluke  
Corporation Pre-Retirement Death Benefit Plan following the Effective Time,     
subject to their terms.                                                         

23  

DEF 14A
33rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 33rd
Danaher also agreed that (i) for the period ending December 31, 1998, the   
Surviving Corporation shall continue the compensation and employee benefit and  
welfare plans and programs of Fluke to the extent practicable as in effect on   
the date hereof, and (ii) thereafter the Surviving Corporation shall provide    
employees of Fluke and its subsidiaries as a whole (A) compensation (including  
bonus and incentive awards) programs and plans and (B) employee benefit and     
welfare plans, programs, contracts, agreements and policies (including          
insurance and pension plans), fringe benefits and vacation policies which are   
substantially the same as or not materially less favorable in the aggregate to  
such employees than those generally in effect with respect to similarly         
situated employees of Danaher.                                                  

Amendments to Retention Agreements. In connection with the Merger Agreement,
employment agreements and change of control agreements between Fluke and        
certain of its employees were amended. See "Amendments to Retention             
Agreements."                                                                    

Indemnification; Insurance. In the Merger Agreement, Danaher has agreed     
that, from and after the Effective Time, it will cause the Surviving            
Corporation in the Merger to indemnify and hold harmless (including providing   
adequate funding), pursuant to the procedures set forth in the Merger           
Agreement, the present and former officers and directors of Fluke in respect    
of acts or omissions occurring prior to the Effective Time to the fullest       
extent provided under the Fluke Articles and Fluke Bylaws in effect on the      
date of the Merger Agreement. Danaher has also agreed to use its reasonable     
efforts to cause the Surviving Corporation in the Merger to maintain in effect  
for not less than three years after the Effective Time the current policies of  
directors' and officers' liability insurance maintained by Fluke with respect   
to matters occurring prior to the Effective Time; provided, however, that (i)   
the Surviving Corporation may substitute therefor policies of at least the      
same coverage containing terms and conditions which are no less advantageous    
to the covered officers and directors and (ii) the Surviving Corporation will   
not be required to pay an annual premium for such insurance in excess of two    
times the last annual premium paid prior to the date hereof, but in such case   
will purchase as much coverage as possible for such amount.                     

ACCOUNTING TREATMENT                                                            

The Merger is intended to qualify as a pooling-of-interests for accounting  
and financial reporting purposes. Consummation of the Merger is conditioned on  
Danaher's receipt of a letter, in form and substance reasonably satisfactory    
to Danaher, from Arthur Andersen LLP, independent auditors of Danaher,          
confirming its letter dated the date of this Proxy Statement/Prospectus to the  
effect that the Merger will qualify as a pooling-of-interests for accounting    
and financial reporting purposes. The Merger Agreement provides that this       
condition may not be waived by Danaher without Fluke's consent; provided that   
such consent shall not be withheld for any reason other than that such waiver   
would result in a material diminution in the value of the consideration to be   
received by the holders of Fluke Common Stock in the Merger; and provided,      
further, that such consent shall not be required if the failure to satisfy the  
condition set forth in the preceding sentence resulted from any act or          
omission of Fluke. Under the pooling-of-interests method of accounting, the     
recorded assets and liabilities of Danaher and Fluke will be carried forward    
to the combined company at their historical recorded amounts, income of the     
combined company will include income of Fluke and Danaher for the entire        
fiscal year in which the combination occurs, and the reported income of the     
separate companies for previous periods will be combined and restated as        
income of the combined company. See "The Merger Agreement--Closing Conditions"  
and "Unaudited Pro Forma Combined Financial Information."                       

It is a condition to the Merger that Fluke obtain written undertakings by   
the thirtieth day prior to the Effective Time from each person who may be an    
"affiliate" of Fluke for purposes of Rule 145 under the Securities Act to the   
effect that, among other things, such person will not sell, transfer or         
otherwise dispose of, or direct or cause the sale, transfer or other            
disposition of, any shares of Fluke Common Stock or Danaher Common Shares or    
Stock Options during the 30 days prior to the Effective Time and will not       
sell, transfer or otherwise dispose of, or direct or cause the sale, transfer   
or other disposition of, any Danaher Common Shares received in or as a result   
of the Merger or otherwise until after such time as Danaher shall have          
publicly released a report in the form of a quarterly earnings report,          
registration statement filed with the Commission, a report                      

24  

DEF 14A
34th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 34th
filed with the Commission or any other public filing, statement or              
announcement which includes the combined financial results of Danaher and       
Fluke for a period of at least 30 days of combined operations of Danaher and    
Fluke following the Effective Time. See "The Merger Agreement--Closing          
Conditions."                                                                    

REGULATORY APPROVALS                                                            

Under the HSR Act and the rules that have been promulgated thereunder by the
Federal Trade Commission (the "FTC"), the Merger may not be consummated unless  
certain information has been furnished to the Antitrust Division of the United  
States Department of Justice (the "Antitrust Division") and the FTC and         
certain waiting period requirements have been satisfied. On May 12, 1998,       
Danaher and Fluke furnished to the FTC and the Antitrust Division certain       
required information and documentary material with respect to the Merger. On    
June 3, 1998, Danaher and Fluke were notified that the waiting period           
requirements under the HSR Act had been satisfied.                              

The Antitrust Division and the FTC frequently scrutinize the legality under 
the antitrust laws of transactions such as the Merger. At any time before or    
after the consummation of the Merger, the Antitrust Division or the FTC could   
take such action under the antitrust laws as it deems necessary or desirable    
in the public interest, including seeking to enjoin the consummation of the     
Merger or seeking the divestiture of substantial assets of Fluke or Danaher.    
Fluke and Danaher believe that the consummation of the Merger will not violate  
the antitrust laws. There can be no assurance, however, that a challenge to     
the Merger on antitrust grounds will not be made, or, if such a challenge is    
made, what the result will be.                                                  

Because of the international scope of Fluke's business, regulatory filings  
may also be required in certain European and other jurisdictions. Danaher and   
Fluke are in the process of determining what, if any, such filings will be      
required, but do not expect any such filings to affect the expected timing of   
the transaction.                                                                

Other than as described herein, the Merger does not require the approval of 
any Federal or state or other agency.                                           

FEDERAL SECURITIES LAW CONSEQUENCES                                             

All Danaher Common Shares issued in connection with the Merger will be      
freely transferable, except that any Danaher Common Shares received by persons  
who are deemed to be "affiliates" (as such term is defined under the            
Securities Act) of Danaher or Fluke prior to the Merger may be sold by them     
only in transactions permitted by the resale provisions of Rule 145 under the   
Securities Act with respect to affiliates of Danaher or Fluke, or Rule 144      
under the Securities Act with respect to persons who are or become affiliates   
of Danaher, or as otherwise permitted under the Securities Act. Persons who     
may be deemed to be affiliates of Danaher or Fluke generally include            
individuals or entities that control, are controlled by or are under common     
control with, such person and generally include the executive officers and      
directors of such person as well as principal stockholders of such person.      

Affiliates may not sell their Danaher Common Shares acquired in connection  
with the Merger, except pursuant to an effective registration under the         
Securities Act covering such shares or in compliance with Rule 145 under the    
Securities Act (or Rule 144 under the Securities Act in the case of persons     
who become affiliates of Danaher) or another applicable exemption from the      
registration requirements of the Securities Act. In general, Rule 145 under     
the Securities Act provides that for one year following the Effective Time an   
affiliate (together with certain related persons) would be entitled to sell     
Danaher Common Shares acquired in connection with the Merger only through       
unsolicited "broker transactions" or in transactions directly with a "market    
maker," as such terms are defined in Rule 144. Additionally, the number of      
shares to be sold by an affiliate (together with certain related persons and    
certain persons acting in concert) within any three-month period for purposes   
of Rule 145 under the Securities Act may not exceed the greater of 1% of the    
outstanding Danaher Common Shares or the average weekly trading volume of such  
shares during the four calendar weeks preceding such sale. Rule 145 under the   
Securities Act will remain available to affiliates if Danaher remains current   
with its informational                                                          

25  

DEF 14A
35th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 35th
filings with the Commission under the Exchange Act. One year after the          
Effective Time, an affiliate of Fluke will be able to sell such Danaher Common  
Shares without being subject to such manner of sale or volume limitations       
provided that Danaher is current with its Exchange Act informational filings    
and such affiliate is not then an affiliate of Danaher. Two years after the     
Effective Time, an affiliate will be able to sell such Danaher Common Shares    
without any restrictions so long as such affiliate had not been an affiliate    
of Danaher for at least three months prior to the date.                         

Commission guidelines regarding qualifying for the "pooling-of-interests"   
method of accounting also limit sales of shares of the acquiring and acquired   
company by affiliates of either company in a business combination. Commission   
guidelines also indicate that the "pooling-of-interests" method of accounting   
generally will not be challenged on the basis of sales by affiliates of the     
acquiring or acquired company if such affiliates do not dispose of any of the   
shares of the corporation they own, or shares of a corporation they receive in  
connection with a merger, during the period beginning 30 days before the        
merger is consummated and ending when financial results covering at least 30    
days of post-merger operations of the combined companies have been published.   
See "The Merger--Accounting Treatment."                                         

STOCK OPTION AGREEMENT                                                          

In connection with the execution of the Merger Agreement, Danaher and Fluke 
entered into the Stock Option Agreement pursuant to which Fluke has issued      
Danaher an Option to purchase up to 3,636,874 shares of Fluke Common Stock (or  
19.9% of the outstanding shares of Fluke Common Stock as of the Record Date,    
without including any shares subject to or issued pursuant to the Option) at    
an exercise price of $34.00 per share. Danaher may exercise the Option, in      
whole or in part, at any time or from time to time within 180 days following    
the occurrence of certain "Triggering Events" which are described below. To     
the knowledge of Fluke and Danaher, no Triggering Event has occurred as of the  
date of this Proxy Statement/Prospectus.                                        

The Option terminates upon the earliest to occur of (i) the Effective Time  
of the Merger; (ii) termination of the Merger Agreement in accordance with the  
provisions thereof unless (A) such termination follows the occurrence of a      
Triggering Event, (B) such termination is by Danaher upon any breach by Fluke   
of any representation, warranty, covenant or agreement set forth in the Merger  
Agreement (if the breach by Fluke giving rise to such right of termination is   
willful) or (C) such termination is by Fluke upon receipt of a Superior         
Proposal (as hereinafter defined); or (iii) the passage of 12 months after      
termination of the Merger Agreement if (A) such termination follows the         
occurrence of a Triggering Event, (B) such termination is by Danaher under      
circumstances described in clause (ii)(B) above or (C) such termination is by   
Fluke under circumstances described in clause (ii)(C) above.                    

Under the Stock Option Agreement, a "Triggering Event" is defined as any    
event or transaction entitling Danaher to terminate the Merger Agreement if     
(i) the Fluke Board shall withdraw, modify or change its recommendation of the  
Merger or shall recommend a Takeover Proposal (as hereinafter defined) to       
Fluke Stockholders or (ii) any person or group shall have acquired 10% or more  
of the outstanding Fluke Common Stock; provided that such event or transaction  
shall only be a Triggering Event if any person or "group" acquiring beneficial  
ownership of more than 10% of the outstanding shares of capital stock of the    
Fluke shall have refused or failed to deliver to Danaher upon request a         
binding commitment reasonably satisfactory in form and substance to Danaher to  
the effect that such acquisition is purely for investment purposes and that     
such person or the members of such "group" shall not take any action that may   
frustrate the transactions contemplated by the Merger Agreement.                

Immediately prior to the occurrence of a Repurchase Event (as defined in the
Stock Option Agreement), (i) following a request of Danaher, delivered prior    
to an Exercise Termination Event (as defined in the Stock Option Agreement),    
Fluke (or any successor thereto) shall repurchase the Option from Danaher at a  
price (the "Option Repurchase Price") equal to the amount by which (A) the      
Market/Offer Price (as defined below) exceeds (B) the Option Price, multiplied  
by the number of shares for which this Option may then be exercised and (ii)    
at the request of the owner of Option Shares from time to time (the "Owner"),   
delivered within 90 days of such                                                

26  

DEF 14A
36th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 36th
occurrence (or such later period as provided in the Stock Option Agreement),    
Fluke shall repurchase such number of the Option Shares from the Owner as the   
Owner shall designate at a price (the "Option Share Repurchase Price") equal    
to the Market/Offer Price (as hereinafter defined) multiplied by the number of  
Option Shares so designated. The term "Market/Offer Price" shall mean the       
highest of (i) the price per share of Fluke Common Stock at which a tender      
offer or exchange offer therefor has been made, (ii) the price per share of     
Fluke Common Stock to be paid by any third party pursuant to an agreement with  
Fluke, (iii) the highest closing price for shares of Fluke Common Stock within  
the six-month period immediately preceding the date Danaher gives notice of     
the required repurchase of this Option or the Owner gives notice of the         
required repurchase of Option Shares, as the case may be, or (iv) in the event  
of a sale of all or a substantial portion of Fluke's assets, the sum of the     
price paid in such sale for such assets and the current market value of the     
remaining assets of Fluke as determined by a nationally recognized investment   
banking firm selected by Danaher or the Owner, as the case may be, and          
reasonably acceptable to Fluke, divided by the number of shares of Fluke        
Common Stock outstanding at the time of such sale; provided, however, that if   
and to the extent the operation of this provision would require a shareholder   
vote pursuant to the "anti-greenmail" provisions set forth in Article V of the  
Fluke Articles, the Market/Offer Price shall be no higher than the Market       
Price (as defined in the Fluke Articles).                                       

Notwithstanding the foregoing, Danaher has agreed in the Merger Agreement   
and in the Stock Option Agreement that the sum of the Termination Fee, the      
Expense Fee and the value of the Option (measured by the Option Repurchase      
Price) shall not exceed $20 million, and if such amounts would be payable,      
Danaher shall determine the allocation among the Termination Fee, Expense Fee   
and the Option.                                                                 

Pursuant to the Stock Option Agreement, at any time after a Purchase Event  
(as defined therein), Fluke will be obligated, under certain circumstances, to  
file a registration statement under the Securities Act if necessary in order    
to permit the sale or other disposition of the shares of Fluke Common Stock     
that have been acquired upon exercise of the Option. Fluke is not required to   
file more than two such registration statements under the Stock Option          
Agreement.                                                                      

The foregoing is a summary of the material provisions of the Stock Option   
Agreement, a copy of which is included as an exhibit to the Registration        
Statement of which this Proxy Statement/Prospectus forms a part. See            
"Available Information." This summary is qualified in its entirety by           
reference to the Stock Option Agreement which is incorporated herein by this    
reference.                                                                      

STOCKHOLDERS SUPPORT AGREEMENTS                                                 

Concurrently with the execution of the Merger Agreement, Danaher and each   
Supporting Stockholder executed Stockholders Support Agreements pursuant to     
which each Supporting Stockholder agreed that, among other things, such         
Supporting Stockholder (i) will not, and will not permit any company, trust or  
other entity controlled by such Supporting Stockholder to, contract to sell,    
sell or otherwise transfer or dispose of any of the shares of the capital       
stock of Fluke of which such Supporting Stockholder is the record or            
beneficial owner ("Supporting Stockholder Shares") or any interest therein or   
securities convertible thereinto or any voting rights with respect thereto,     
other than (x) pursuant to the Merger or (y) with Danaher's prior written       
consent, (ii) will not, and will not permit any such company, trust or other    
entity to, directly or indirectly (including through its officers, directors,   
employees, or other representatives), solicit, initiate, encourage or           
facilitate, or furnish or disclose non-public information in furtherance of,    
any inquiries or the making of any proposal with respect to any Competing       
Transaction, or negotiate, explore or otherwise engage in discussions with any  
person (other than Danaher, Sub or their respective directors, officers,        
employees, agents and representatives) with respect to any Competing            
Transaction or enter into any agreement, arrangement, or understanding with     
respect to any Competing Transaction or agree to or otherwise assist in the     
effectuation of any Competing Transaction; provided, however, that nothing in   
any Stockholders Support Agreement prevents any Supporting Stockholder from     
taking any action or omitting to take any action as a member of the Fluke       
Board to the extent permitted by the Merger Agreement (as described below       
under the caption "The Merger Agreement--Amendment; Termination; Expenses"),    
and (iii) will vote all of such Supporting Stockholder Shares beneficially      
owned by such Supporting Stockholder, or over which such Supporting             
Stockholder has voting power or control, directly                               

27  

DEF 14A
37th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 37th
or indirectly (including any Fluke Common Stock acquired after the date of the  
Stockholders Support Agreement), at the record date for any meeting of          
stockholders of Fluke called to consider and vote to approve the Merger and     
the Merger Agreement and/or the transactions contemplated thereby in favor      
thereof and such Supporting Stockholder will not vote such Supporting           
Stockholder Shares in favor of any Competing Transaction. In the event the      
Merger Agreement is terminated in accordance with its terms, the Stockholders   
Support Agreements shall automatically terminate and be of no further force or  
effect; provided, however, that if the Merger Agreement is terminated under     
circumstances in which the Termination Fee shall be payable under the Merger    
Agreement, then the Stockholders Support Agreements shall only terminate upon   
the payment in full by Fluke of all amounts payable pursuant to the Merger      
Agreement. Upon such termination, except for any rights any party may have in   
respect of any breach by any other party of its obligations hereunder, none of  
the parties hereto shall have any further obligation or liability under such    
agreements.                                                                     

Each Supporting Stockholder and the number of shares of Fluke Common Stock  
beneficially owned (excluding shares which may be acquired upon the exercise    
of options) by such Supporting Stockholder or over which such Supporting        
Stockholder has voting control are as follows: Fluke Capital and Management     
Services Company ("FCMS") (1,862,792 shares); David Fluke (1,989,508 shares     
(including shares held through FCMS)); John Fluke, Jr. (1,957,146 shares        
(including shares held through FCMS)); William Parzybok (22,173 shares); David  
Katri (14,846 shares); Elizabeth Huebner (4,135 shares); Douglas McKnight (10,  
540 shares); and George Winn (5,696 shares).                                    

FCMS, David Fluke and John Fluke, Jr., in their Stockholders Support        
Agreement with Danaher agreed, among other things and subject to certain        
limited exceptions that they each will not, for three years from the Effective  
Time, carry on or participate in the design, manufacture or marketing of        
electronic test tools (the "Company Business") in competition with the          
Surviving Company in any country in which the Surviving Company operates. Each  
of the aforementioned Supporting Stockholders also agrees, for a period of      
five years from the Effective Time, not to lend or allow his name or            
reputation to be used in or to promote any Company Business, other than for     
the benefit of Danaher and its affiliates (including the Surviving Company),    
or solicit, divert or attempt to divert from Danaher and its affiliates any     
business constituting, or any customer of, or any supplier of, any part of the  
Surviving Company Business then conducted by the Surviving Company, Danaher or  
any of their affiliates.                                                        

The Stockholders Support Agreement by and among Danaher and William         
Parzybok, David Katri, Elizabeth Huebner, Douglas McKnight and George Winn      
includes restrictions similar in scope to those described in the preceding      
paragraph, which survive for three years after the Effective Time.              

The foregoing is a summary of the material provisions of the Stockholders   
Support Agreements, which are filed as exhibits to the Registration Statement   
of which this Proxy Statement/Prospectus forms a part. See "Available           
Information." This summary is qualified in its entirety by reference to the     
full texts of the Stockholders Support Agreements.                              

AMENDMENTS TO RETENTION AGREEMENTS                                              

In connection with the Merger Agreement, the Employment Agreement dated     
December 12, 1995 between Fluke and William Parzybok (the "Parzybok Employment  
Agreement") and the Employment Agreement dated December 12, 1995 between Fluke  
and Richard Van Saun (the "Van Saun Employment Agreement") were amended and     
restated. The Parzybok and Van Saun Employment Agreements provide for the       
payment of certain severance benefits upon a change of control of Fluke and     
although these Agreements contained non-competition provisions, such            
provisions did not apply following a change of control.                         

As a condition of Danaher entering into the Merger Agreement, Fluke and     
Messrs. Parzybok and Van Saun amended and restated the Parzybok Employment      
Agreement and the Van Saun Employment Agreement, respectively, to (i)           
eliminate their option to elect to receive a lump sum cash payment for certain  
Fluke stock                                                                     

28  

DEF 14A
38th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 38th
options held by them upon a change of control and (ii) provide that the non-    
competition provisions in the Employment Agreements will continue following     
the acquisition of Fluke by Danaher.                                            

Under the terms of the Parzybok Employment Agreement, if Mr. Parzybok leaves
after a change of control, Fluke must pay, for the remaining term of the        
contract (minimum of one year), severance equal to the average annual cash      
compensation for the three complete fiscal years prior to the date of           
termination, and certain other compensation unreduced by any compensation from  
other employment. If, as is expected, Mr. Parzybok leaves Fluke on or around    
July 10, 1998, the following maximum severance benefits would be payable: cash  
compensation, $2,044,000; estimated variable compensation, $57,000;             
contribution to the supplemental retirement program, $95,000; payments in lieu  
of continued accruals and contributions to the defined benefit and defined      
contribution plans, $38,000; immediate exercisability of all stock options for  
the term of the agreement, and the continuation of medical and life insurance   
benefits for the term of the agreement. If the total amounts payable to Mr.     
Parzybok under his employment agreement, together with all other payments to    
which he is entitled, would constitute an excess parachute payment as defined   
in Section 280G of the Code, he will receive the larger of (i) the sum of such  
payments reduced to the largest amount that may be paid without any portion of  
such amount being subject to the excise tax imposed by Section 4999 of the      
Code and (ii) the sum of such payments net of the excise tax (in both cases     
after adjustment for normal income taxes).                                      

In addition, the Van Saun Employment Agreement was further amended to       
provide that the term of Mr. Van Saun's employment by Fluke would continue for  
a period of at least one year following the Effective Time of the Merger and    
that he would provide Fluke a minimum of six months' prior written notice of    
his intention to terminate his employment with Fluke. If Mr. Van Saun           
terminates his employment with Fluke prior to one year following the Closing    
Date or without providing six months notice, Fluke shall not be liable to him   
for any severance payments otherwise due Mr. Van Saun under the Van Saun        
Employment Agreement.                                                           

Fluke and David Katri amended the Change of Control Agreement dated December
11, 1996 between Fluke and David Katri (the "Katri Change of Control            
Agreement") to provide that Fluke's becoming a subsidiary of Danaher would not  
constitute a material reduction in the level or nature of his status, title,    
position, authority or responsibility as an officer of Fluke. Mr. Katri waived  
any right to terminate his employment with Fluke because of the change of       
control of Fluke contemplated by the Merger Agreement. Mr. Katri also agreed    
not to compete with Fluke for a three year period following termination of his  
employment with Fluke.                                                          

The Katri Change of Control Agreement will remain in effect until the second
anniversary of the Closing Date and at that time, a Separation Agreement        
entered into among Danaher, Fluke and Mr. Katri (the "Separation Agreement")    
will become effective. Under the Separation Agreement, if Mr. Katri is          
terminated by Fluke without cause or if he terminates his employment for good   
reason, he has the right to payment of two years' severance compensation by     
Fluke.                                                                          

Fluke is a party to change of control agreements with certain executive     
officers, including, among others Elizabeth Huebner, Vice President, Chief      
Financial Officer and Douglas McKnight, Vice President, General Counsel and     
Corporate Secretary. Under the terms of these agreements, if an officer         
terminates his or her employment for good reason based upon a material          
reduction in the level or nature of the employee's status, title, position,     
authority or responsibility as an officer of Fluke, as in effect immediately    
prior to the change of control, then certain compensation and other benefits    
will be paid. If, as is expected, Ms. Huebner and Mr. McKnight leave Fluke on   
or around July 10, 1998, severance benefits would consist of full base salary   
for the minimum 90 day period between the notice of termination and the         
termination date, two years of annual cash compensation, an annual              
contribution to the supplemental retirement program, and immediate              
exercisability of all stock options. The maximum severance benefits payable to  
Ms. Huebner and Mr. McKnight would be $562,000 and $513,000, respectively. No   
other Fluke employee that is party to a change of control agreement with Fluke  
is expected to terminate employment in connection with this transaction. These  
change of control agreements provide that for a three year period following     
the Closing Date, Ms. Huebner and Mr. McKnight will not compete with Fluke.     

29  

DEF 14A
39th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 39th
MANAGEMENT AND OPERATIONS AFTER THE MERGER                                      

After the Merger, the Surviving Company will be a wholly owned subsidiary of
Danaher. Danaher currently intends to retain all of Fluke's facilities and they 
will continue to operate as they have in the past. Danaher also intends to      
continue certain Fluke benefits plans. See "--Interests of Certain Persons in   
the Merger--Fluke Options" and "--Interests of Certain Persons in the Merger--  
Benefit Plans and Employee Matters."                                            

It is currently contemplated that, while certain Fluke executives and       
employees will retire following the Merger, most of Fluke's chief operating     
personnel are expected to remain with the Surviving Company.                    

30

DEF 14A
40th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 40th
THE MERGER AGREEMENT  

The description of the Merger Agreement set forth below does not purport to 
be complete and is qualified in its entirety by reference to the Merger         
Agreement, a copy of which is attached as Annex A to this Proxy                 
Statement/Prospectus and incorporated by reference herein.                      

TERMS OF THE MERGER                                                             

The Merger. Subject to the terms and conditions of the Merger Agreement, Sub
will merge with and into Fluke at the Effective Time. Fluke will continue as    
the Surviving Corporation. The separate corporate existence of Sub will then    
cease, and the internal corporate affairs of the Surviving Corporation will     
continue to be governed by the laws of the State of Washington.                 

Effective Time. Subject to the provisions of the Merger Agreement, as soon  
as practicable after the satisfaction or waiver, if applicable, of the          
conditions to the Merger, the parties shall file articles of merger or other    
appropriate documents (in any such case, the "Articles of Merger") executed in  
accordance with the relevant provisions of the Washington Business Corporation  
Act ("WBCA") and shall make all other filings or recordings required under the  
WBCA. The Merger shall become effective at such time as the Articles of Merger  
are duly filed with the Washington Secretary of State, or at such other time    
as Sub and Fluke shall agree should be specified in the Articles of Merger      
(the date and time of such filing, or such later date or time as may be set     
forth therein, being the "Effective Time").                                     

Certificate of Incorporation and By-Laws. The Merger Agreement provides that
the certificate of incorporation of Sub as in effect immediately prior to the   
Effective Time will become the certificate of incorporation of the Surviving    
Corporation (except that such certificate of incorporation shall be amended at  
the Effective Time to provide that the name of the Surviving Corporation shall  
be "Fluke Corporation"). The by-laws of Sub in effect at the Effective Time     
will become the by-laws of the Surviving Corporation.                           

Directors. The directors of Sub at the Effective Time shall continue as the 
directors of the Surviving Corporation, until the earlier of their resignation  
or removal or until their respective successors are duly elected and            
qualified, as the case may be.                                                  

Officers. The officers of Fluke immediately prior to the Effective Time     
shall become the officers of the Surviving Corporation, until the earlier of    
their resignation or removal or until their respective successors are duly      
elected and qualified, as the case may be.                                      

EFFECT ON CAPITAL STOCK                                                         

Conversion of Fluke Common Stock in the Merger. At the Effective Time, by   
virtue of the Merger and without any action on the part of Danaher, Sub,        
Fluke, or the holders of any shares of Fluke Common Stock or any shares of      
capital stock of Sub: (i) each share of the capital stock of Sub issued and     
outstanding immediately prior to the Effective Time shall be converted into     
and exchanged for one fully paid and nonassessable share of common stock of     
the Surviving Corporation; and (ii) each share of Fluke Common Stock that is    
owned by Fluke or by any subsidiary of Fluke and each share of Fluke Common     
Stock that is owned by Danaher, Sub or any other subsidiary of Danaher          
immediately prior to the Effective Time shall automatically be canceled and     
retired without any conversion thereof and no consideration shall be delivered  
with respect thereto.                                                           

Each share of Fluke Common Stock issued and outstanding as of the Effective 
Time, other than Dissenting Shares, shall be converted into the right to        
receive 0.90478 of a Danaher Common Share (subject to increase under certain    
circumstances, as described under "--Amendment; Termination; Expenses"). If,    
prior to the Effective Time, Danaher should split or combine Danaher Common     
Shares, or pay a stock dividend or other stock distribution in Danaher Common   
Shares, then the Exchange Ratio will be appropriately adjusted to reflect such  
split, combination, dividend or other distribution.                             

31  

DEF 14A
41st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 41st
As of the Effective Time, all such shares of Fluke Common Stock shall no    
longer be outstanding and shall automatically be canceled and retired and       
shall cease to exist, and each certificate previously representing any such     
shares shall thereafter represent the right to receive a certificate            
representing the Danaher Common Shares into which such Fluke Common Stock was   
converted in the Merger. The holders of such certificates previously            
evidencing such shares of Fluke Common Stock and outstanding immediately prior  
to the Effective Time shall cease to have any rights with respect to such       
shares of Fluke Common Stock as of the Effective Time except as otherwise       
provided in the Merger Agreement or by law. Such certificates previously        
representing shares of Fluke Common Stock shall be exchanged for certificates   
representing whole Danaher Common Shares issued in consideration therefor upon  
the surrender of such certificates in accordance with the provisions of         
"Exchange of Certificates," without interest. No fractional Danaher Common      
Share shall be issued, and in lieu thereof a cash payment shall be made. See    
"No Fractional Shares."                                                         

Exchange of Certificates. Prior to the Effective Time, Danaher shall enter  
into an agreement with SunTrust Bank, Atlanta as Exchange Agent, and as         
contemplated by such agreement, Danaher shall deposit, or shall cause to be     
deposited, with the Exchange Agent as of the Effective Time for the benefit of  
the holders of shares of Fluke Common Stock, for exchange through the Exchange  
Agent, certificates representing the Danaher Common Shares issuable pursuant    
to the terms of the Merger Agreement described in "Effect on Capital Stock" in  
exchange for outstanding shares of Fluke Common Stock (such certificates        
representing Danaher Common Shares, together with any dividends or              
distributions with respect thereto, being collectively referred to as the       
"Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable             
instructions, deliver the Danaher Common Shares contemplated to be issued       
pursuant to the terms of the Merger Agreement described in "Effect on Capital   
Stock" out of the Exchange Fund. Except as contemplated by the terms of the     
Merger Agreement described in "No Fractional Shares," the Exchange Fund shall   
not be used for any other purpose.                                              

As soon as reasonably practicable after the Effective Time, Danaher shall   
instruct the Exchange Agent to mail to each holder of record of a certificate   
or certificates which immediately prior to the Effective Time represented       
outstanding shares of Fluke Common Stock (the "Certificates"), (i) a letter of  
transmittal (which shall specify that delivery shall be effected, and risk of   
loss and title to the Certificates shall pass, only upon proper delivery of     
the Certificates to the Exchange Agent and which shall be in a customary form)  
and (ii) instructions for use in effecting the surrender of the Certificates    
in exchange for certificates representing Danaher Common Shares. Until          
surrendered as contemplated by the terms of the Merger Agreement, each          
Certificate shall be deemed at any time after the Effective Time to represent   
only the right to receive upon such surrender the certificate evidencing whole  
Danaher Common Shares, cash in lieu of any fractional Danaher Common Shares to  
which such holder is entitled and any dividends or other distributions to       
which such holder is entitled pursuant to the terms of the Merger Agreement.    
No interest will be paid or will accrue on any cash payable pursuant to the     
provisions of the Merger Agreement concerning unexchanged shares and            
fractional shares.                                                              

No dividends or other distributions declared or made after the Effective    
Time with respect to Danaher Common Shares with a record date after the         
Effective Time shall be paid to the holder of any unsurrendered Certificate     
with respect to the Danaher Common Shares represented thereby, and no cash      
payment in lieu of fractional shares shall be paid to any such holder, in each  
case until the surrender of such Certificate in accordance with the terms of    
the Merger Agreement.                                                           

All Danaher Common Shares issued upon the surrender for exchange of         
Certificates in accordance with the terms of the Merger Agreement shall be      
deemed to have been issued (and paid) in full satisfaction of all rights        
pertaining to the shares of Fluke Common Stock theretofore represented by such  
Certificates, subject, however, to the Surviving Corporation's obligation to    
pay any dividends or make any other distributions with a record date prior to   
the Effective Time which may have been declared or made by Fluke on such        
shares of Fluke Common Stock in accordance with the terms of the Merger         
Agreement or prior to the date of the Merger Agreement and which remain unpaid  
at the Effective Time and have not been paid prior to surrender. At the         
Effective Time, the stock transfer books of Fluke shall be closed, and there    
shall be no further registration of transfers of shares of Fluke Common Stock   
thereafter on the records of Fluke.                                             

32  

DEF 14A
42nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 42nd
No Fractional Shares. No certificates or scrip representing fractional      
Danaher Common Shares shall be issued upon the surrender for exchange of        
Certificates, and such fractional share interests will not entitle the owner    
thereof to vote or to any rights of a Danaher Stockholder. Following the        
Effective Time, Danaher shall instruct the Exchange Agent to determine the      
excess of (x) the number of full Danaher Common Shares delivered to the         
Exchange Agent by Danaher over (y) the aggregate number of Danaher Common       
Shares to be distributed to holders of Certificates (such excess being the      
"Excess Shares"). As soon after the Effective Time as practicable, the          
Exchange Agent, as agent for such holders of Certificates, shall sell the       
Excess Shares at the then prevailing prices on the NYSE. Until the net          
proceeds of such sale or sales have been distributed to such holders of         
Certificates, the Exchange Agent will hold such proceeds in trust for such      
holders of Certificates. The Exchange Agent shall determine the portion of      
such amount to which each holder of one or more Certificates shall be           
entitled, if any, and shall promptly pay such amounts to such holders of        
Certificates subject to and in accordance with the terms of the Merger          
Agreement.                                                                      

Dissenting Stockholders. Notwithstanding anything in the Merger Agreement to
the contrary, shares of Fluke Common Stock which are issued and outstanding     
immediately prior to the Effective Time and which are held by stockholders who  
did not vote in favor of the adoption of the Merger Agreement, who are          
entitled to demand the fair value of such shares of Fluke Common Stock under    
Sections 13.010 through 13.310 of the WBCA, and who comply with all of the      
relevant provisions of such Sections (the "Dissenting Shares") shall not be     
converted into or be exchangeable for the right to receive Danaher Common       
Shares (unless and until such holders shall have failed to perfect or shall     
have effectively withdrawn or lost their dissenters' rights under the WBCA),    
but shall instead be entitled to all applicable dissenters' rights as are       
prescribed by the WBCA. If any such holder shall have failed to perfect or      
shall have effectively withdrawn or lost such dissenters' rights, such          
holder's shares of Fluke Common Stock shall thereupon be converted into and     
become exchangeable for the right to receive, as of the Effective Time,         
Danaher Common Shares, without any interest thereon. Fluke shall give Danaher   
(i) prompt notice of any written demands for payment for any Fluke Common       
Stock under Section 13.210 of the WBCA, attempted withdrawals of such demands,  
and any other instruments served pursuant to the WBCA and received by Fluke     
relating to dissenters' rights, and (ii) the opportunity to participate in and  
direct all negotiations and proceedings with respect to the exercise of         
dissenters' rights under the WBCA. Fluke shall not, except with the prior       
written consent of Danaher, voluntarily make any payment with respect to any    
demands for payment for Fluke Common Stock under the WBCA, offer to settle or   
settle any such demands or approve any withdrawal of any such demands. The      
relevant provisions of the WBCA are attached to this Proxy                      
Statement/Prospectus as Annex C.                                                

REPRESENTATIONS AND WARRANTIES                                                  

The Merger Agreement contains various representations and warranties of the 
parties thereto. The Merger Agreement includes representations and warranties   
by Fluke as to (i) the corporate organization, standing and power of Fluke and  
its subsidiaries, (ii) approvals by the Fluke Board and fairness opinions       
received by Fluke, (iii) its capitalization, (iv) the authorization of the      
Merger Agreement, (v) pending or threatened litigation, (vi) the Merger         
Agreement's noncontravention of any agreement, law or charter or by-law         
provision and the absence of the need (except as specified) for governmental    
or third-party consents to the Merger, (vii) the terms, existence, operations,  
liabilities and compliance with applicable laws of Fluke employee plans, and    
certain other matters relating to the Employee Retirement Income Security Act   
of 1974, as amended, (viii) payment of taxes, (ix) ownership of and rights to   
use certain intellectual property, (x) the accuracy of Fluke's financial        
statements and filings with the Commission, (xi) the conduct of Fluke's         
business in the ordinary and usual course and the absence of any material       
adverse change (as hereinafter defined), (xii) certain contracts and leases of  
Fluke and its subsidiaries, (xiii) parachute payments, (xiv) brokers and        
finders employed by Fluke, (xv) the accuracy of information to be supplied by   
Fluke for inclusion in this Proxy Statement/Prospectus and in the Registration  
Statement, (xvi) labor agreements involving Fluke or its subsidiaries, (xvii)   
material contracts and debt instruments, (xviii) title to properties, (xix)     
the amendment of the Fluke Rights Agreement, (xx) state statutes, and (xxi)     
the accounting for the Merger as a pooling-of-interests.                        

The Merger Agreement also includes representations and warranties by Danaher
and Sub as to: (i) the corporate organization, standing and power of Danaher    
and its subsidiaries; (ii) the authorization of the Merger                      

33  

DEF 14A
43rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 43rd
Agreement and the Stock Option Agreement, (iii) Danaher's capitalization, (iv)  
the authorization of the Danaher Common Shares to be issued pursuant to the     
Merger Agreement, (v) pending or threatened litigation, (vi) the Merger         
Agreement's noncontravention of any agreement, law or charter or by-law         
provision and the absence of the need (except as specified) for governmental    
or third-party consents to the Merger, (vii) the accuracy of Danaher's          
financial statements and filings with the Commission, (viii) the absence of     
any material adverse change, (ix) the ownership, activities and assets of Sub,  
(x) brokers and finders employed by Danaher, (xi) the accuracy of information   
to be supplied by Danaher for inclusion in this Proxy Statement/Prospectus and  
in the Registration Statement, and (xii) the accounting for the Merger as a     
pooling-of-interests.                                                           

CERTAIN COVENANTS                                                               

Conduct of Business by Fluke. The Merger Agreement provides that between the
date of the Merger Agreement and the Effective Time, Fluke shall, and shall     
cause its subsidiaries to, carry on their respective businesses in the          
ordinary course and use all reasonable efforts to preserve intact their         
current business organizations, keep available the services of their current    
officers and employees and preserve their relationships with customers,         
suppliers and others having business dealings with them. The Merger Agreement   
further provides, without limiting the generality of the foregoing, that        
between the date of the Merger Agreement and the Effective Time, except as      
contemplated by the Merger Agreement (or as disclosed by Fluke to Danaher at    
the time of entering into the Merger Agreement), Fluke shall not, and shall     
not permit any of its subsidiaries, without the prior written approval of       
Danaher, to: (i) (A) declare, set aside or pay (whether in cash, stock,         
property, or otherwise) any dividends on, or make any other distributions in    
respect of, any of its capital stock, other than (x) the regular quarterly      
dividend declared by Fluke with a record date of April 24, 1998 and (y)         
dividends and distributions by any direct or indirect wholly owned subsidiary   
of Fluke to its parent, (B) split, combine or reclassify any of its capital     
stock or issue or authorize the issuance of any other securities in respect     
of, in lieu of or in substitution for shares of its capital stock or (C)        
purchase, redeem or otherwise acquire any shares of capital stock of Fluke or   
any of its subsidiaries or any other securities thereof or any rights,          
warrants or options to acquire any such shares or other securities; (ii) other  
than the issuance of Fluke Common Stock upon the exercise of Stock Options      
outstanding on the date of the Merger Agreement in accordance with their        
present terms or in accordance with the present terms of any employment         
agreements existing on the date of the Merger Agreement, (A) issue, deliver,    
sell, award, pledge, dispose of or otherwise encumber or authorize or propose   
the issuance, delivery, grant, sale, award, pledge or other encumbrance         
(including limitations in voting rights) or authorization of, any shares of     
its capital stock, any other voting securities or any securities convertible    
into, or any rights, warrants or options to acquire, any such shares, voting    
securities or convertible securities, (B) amend or otherwise modify the terms   
of any such rights, warrants or options or (C) accelerate the vesting of any    
of the Stock Options; (iii) amend its certificate of incorporation, by-laws or  
other comparable charter or organizational documents, or amend or take any      
other action with respect to the Rights Agreement or the Rights that is         
adverse to Danaher; (iv) acquire or agree to acquire (for cash or shares of     
stock or otherwise) (A) by merging or consolidating with, or by purchasing a    
substantial portion of the assets of, or by any other manner, any business or   
any corporation, partnership, joint venture, association or other business      
organization or division thereof or (B) any assets except purchases of          
inventory in the ordinary course of business consistent with past practice;     
(v) mortgage or otherwise encumber or subject to any lien, or sell, lease,      
exchange or otherwise dispose of any of its properties or assets, except for    
sales of its properties or assets in the ordinary course of business            
consistent with past practice; (vi)(A) incur any indebtedness for borrowed      
money (including under existing credit facilities) or guarantee any such        
indebtedness of another person, issue or sell any debt securities or warrants   
or other rights to acquire any debt securities of Fluke or any of its           
subsidiaries, guarantee any debt securities of another person, enter into any   
"keep well" or other agreement to maintain any financial statement condition    
of another person or enter into any arrangement having the economic effect of   
any of the foregoing, except for the incurrence of indebtedness to finance      
Fluke's working capital needs which, in the aggregate, do not exceed            
$1,000,000 provided that the terms of any such indebtedness (including any      
prepayment penalty) shall be subject to the approval of Danaher, or (B) make    
any loans, advances or capital contributions to, or investments in, any other   
person, other than to Fluke or any direct or indirect wholly owned subsidiary   
of Fluke; (vii) make or agree to make any new capital expenditures which,       
individually, exceed $250,000 or which, in the aggregate, exceed                

34  

DEF 14A
44th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 44th
$2,000,000; (viii) make or rescind any express or deemed election relating to   
taxes, settle or compromise any claim, action, suit, litigation, proceeding,    
arbitration, investigation, audit or controversy relating to taxes, or change   
any of its methods of reporting income or deductions for Federal income tax     
purposes, except as may be required by applicable law; (ix) pay, discharge or   
satisfy any claims, liabilities or obligations (absolute, accrued, asserted or  
unasserted, contingent or otherwise), other than the payment, discharge or      
satisfaction, in the ordinary course of business consistent with past practice  
or in accordance with their terms, of liabilities reflected or reserved         
against in, or contemplated by, the most recent consolidated financial          
statements (or the notes thereto) of Fluke included in the documents filed      
with the Commission or incurred in the ordinary course of business consistent   
with past practice; (x) (A) increase the rate or terms of compensation payable  
or to become payable generally to any of Fluke's directors, officers or         
employees, (B) pay or agree to pay any pension, retirement allowance or other   
employee benefit not provided for by any existing Pension Plan, Benefit Plan    
or employment agreement described in documents filed by Fluke with the          
Commission prior to the date of the Merger Agreement, (C) commit itself to any  
additional pension, profit sharing, bonus, incentive, deferred compensation,    
stock purchase, stock option, stock appreciation right, group insurance,        
severance pay, continuation pay, termination pay, retirement or other employee  
benefit plan, agreement or arrangement, or increase the rate or terms of any    
employee plan or benefit arrangement, (D) enter into any employment agreement   
with or for the benefit of any person or (E) increase the rate of compensation  
under or otherwise change the terms of any existing employment agreement; (xi)  
except in the ordinary course of business consistent with past practice,        
modify, amend, terminate, renew or fail to use reasonable business efforts to   
renew any material contract or agreement to which Fluke or any subsidiary is a  
party or waive, release or assign any material rights or claims; or (xii)       
authorize any of, or commit or agree to take any of the foregoing actions.      

Conduct of Business by Danaher. During the period from the date of the      
Merger Agreement to the Effective Time, Danaher has agreed that it shall, and   
shall cause its subsidiaries to, carry on their respective businesses in the    
ordinary course and use all reasonable efforts to preserve their relationships  
with customers, suppliers and others having business dealings with them;        
provided that the foregoing shall not prevent Danaher or any of its             
subsidiaries from discontinuing or disposing of any part of its assets or       
business or from acquiring any assets or businesses or from entering into any   
financing transactions if such action is, in the judgment of Danaher,           
desirable in the conduct of the business of Danaher and its subsidiaries.       
Without limiting the generality of the foregoing, during the period from the    
date of the Merger Agreement to the Effective Time, except as contemplated by   
the Merger Agreement (or as disclosed to Fluke at the time of entering into     
the Merger Agreement), Danaher has agreed that it shall not, and shall not      
permit any of its subsidiaries to: (i) (A) declare, set aside or pay (whether   
in cash or property) any dividends on, or make any other distributions in       
respect of, any capital stock other than dividends and distributions by any     
direct or indirect wholly owned subsidiary of Danaher to its parent and except  
for regular quarterly cash dividends (in an amount determined in a manner       
consistent with Danaher's past practice) declared by the Danaher Board with     
customary record and payment dates, (B) split, combine or reclassify any of     
its capital stock (other than the previously announced stock split proposed by  
Danaher) or issue or authorize the issuance of any other securities in respect  
of, in lieu of or in substitution for shares of Danaher's capital stock or (C)  
purchase, redeem or otherwise acquire any Danaher Common Shares; (ii) amend     
its certificate of incorporation (except for the purpose of increasing its      
authorized capitalization), by-laws or other comparable charter or              
organizational documents in a manner which would reasonably be expected to be   
materially adverse to the stockholders of Fluke; or (iii) authorize, or commit  
or agree to take any of, the foregoing actions.                                 

No Solicitation. Fluke has agreed in the Merger Agreement that it shall not,
nor shall it permit any of its subsidiaries to, nor shall it authorize or       
permit any officer, director or employee of, or any investment banker,          
attorney or other advisor or representative of, Fluke or any of its             
subsidiaries to, (i) solicit or initiate, or encourage the submission of, any   
Takeover Proposal, (ii) participate in any discussions or negotiations          
regarding, or furnish to any person any information with respect to, or take    
any other action to facilitate any inquiries or the making of any proposal      
that constitutes, or may reasonably be expected to lead to, any Takeover        
Proposal; provided, however, that prior to the Effective Time, to the extent    
required by the fiduciary obligations of the Fluke Board, as determined in      
good faith by the Fluke Board after receipt of the advice of outside counsel,   
Fluke                                                                           

35  

DEF 14A
45th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 45th
may, (A) in response to an unsolicited request therefor, furnish information    
with respect to Fluke to any person pursuant to a confidentiality agreement no  
less favorable to Fluke than the Non-Disclosure Agreement and discuss such      
information (but not the terms of any possible Takeover Proposal) with such     
person and (B) upon receipt by Fluke of a Takeover Proposal, following          
delivery to Danaher of the notice required pursuant to the Merger Agreement,    
participate in negotiations regarding such Takeover Proposal. For purposes of   
the Merger Agreement, "Takeover Proposal" means any proposal or offer (whether  
or not in writing and whether or not delivered to Fluke's shareholders          
generally) for an Alternative Transaction. An "Alternative Transaction" means   
a merger or other business combination involving Fluke or any of its Material   
Subsidiaries (as defined in the Merger Agreement) or any acquisition in any     
manner, directly or indirectly, of any voting securities of, or in excess of    
10% of the book value of the assets of, Fluke or any of its Material            
Subsidiaries, or any other transaction that would involve the transfer or       
potential transfer of an interest in or control of Fluke or any of its          
Material Subsidiaries, other than the transactions contemplated by the Merger   
Agreement.                                                                      

Neither the Fluke Board nor any committee thereof shall (i) withdraw or     
modify, or propose to withdraw or modify (other than a nonpublic proposal by a  
committee to the full Fluke Board), in a manner adverse to Danaher or Sub, the  
approval or recommendation by such Fluke Board or any such committee of the     
Merger Agreement or the Merger, (ii) approve or recommend, or propose to        
approve or recommend (other than a nonpublic proposal by a committee to the     
full Fluke Board), any Takeover Proposal or (iii) enter into any agreement      
with respect to any Takeover Proposal. Notwithstanding the foregoing, in the    
event the Fluke Board receives a Takeover Proposal that, in the exercise of     
its fiduciary obligations (as determined in good faith by the Fluke Board       
after receipt of the written advice of outside counsel), it determines to be a  
Superior Proposal, the Fluke Board may (subject to compliance with its          
notification and payment obligations as described in the following sentences)   
withdraw or modify its approval or recommendation of the Merger Agreement or    
the Merger, approve or recommend any such Superior Proposal, enter into an      
agreement with respect to such Superior Proposal or terminate the Merger        
Agreement, in each case at any time after the second business day following     
Danaher's receipt of written notice (a "Notice of Superior Proposal") advising  
Danaher that the Fluke Board has received a Superior Proposal, specifying the   
material terms and conditions of such Superior Proposal and identifying the     
person making such Superior Proposal. In addition, if any of (i), (ii) or       
(iii) listed above shall occur, Fluke shall pay, or cause to be paid, to        
Danaher the Termination Fee and the Expense Fee (as described below under "--   
Amendment; Termination; Expenses"). For purposes of the Merger Agreement, a     
"Superior Proposal" means any bona fide Takeover Proposal to acquire, directly  
or indirectly, for consideration consisting of cash and/or securities, more     
than 50% of the shares of Fluke Common Stock then outstanding or all or         
substantially all the assets of Fluke, and otherwise on terms which the Fluke   
Board determines in its good faith reasonable judgment (after receipt of the    
written advice of a financial advisor of nationally recognized reputation) to   
be more favorable from a financial point of view to Fluke Stockholders than     
the Merger. Nothing in the Merger Agreement shall prohibit Fluke from taking    
and disclosing to Fluke Stockholders a position contemplated by Rule 14e-2(a)   
under the Exchange Act or otherwise making any disclosures required by the      
fiduciary obligations of the Fluke Board that would not violate or be           
inconsistent with Fluke's obligations under the Merger Agreement.               

In addition to the obligations of Fluke described above, Fluke shall        
promptly advise Danaher orally and in writing of any request for information    
or of any Takeover Proposal, or any inquiry with respect to or which could      
reasonably be expected to lead to any Takeover Proposal, the material terms     
and conditions of such request, Takeover Proposal or inquiry, and the identity  
of the person making any such Takeover Proposal or inquiry. Fluke shall keep    
Danaher informed on a current basis of the status and details of any such       
request, Takeover Proposal or inquiry.                                          

Benefit Plans and Employee Matters. In the Merger Agreement, Danaher has    
agreed that Fluke will honor, and, from and after the Effective Time, Danaher   
will cause the Surviving Corporation to honor, in accordance with their         
respective terms as in effect on the date hereof, certain employment,           
severance and bonus agreements and arrangements to which Fluke is a party.      
Danaher intends to continue the Fluke Corporation Supplemental Retirement       
Plan, the Fluke Corporation Executive Deferred Compensation Plan and the Fluke  
Corporation Pre-Retirement Death Benefit Plan following the Effective Time,     
subject to their terms.                                                         

36  

DEF 14A
46th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 46th
Danaher has further agreed in the Merger Agreement that (i) for the period  
ending December 31, 1998, the Surviving Corporation shall continue the          
compensation and employee benefit and welfare plans and programs of Fluke to    
the extent practicable as in effect on the date hereof, and (ii) thereafter     
the Surviving Corporation shall provide employees of Fluke and its              
subsidiaries as a whole (A) compensation (including bonus and incentive         
awards) programs and plans and (B) employee benefit and welfare plans,          
programs, contracts, agreements and policies (including insurance and pension   
plans), fringe benefits and vacation policies which are substantially the same  
as or not materially less favorable in the aggregate to such employees than     
those generally in effect with respect to similarly situated employees of       
Danaher.                                                                        

CLOSING CONDITIONS                                                              

Conditions to Each Party's Obligations to Effect the Merger. The Merger     
Agreement makes the respective obligation of each party to effect the Merger    
subject to the satisfaction or waiver on or prior to the Closing Date of the    
following conditions:                                                           

(i) the Fluke Stockholders shall have adopted the Merger Agreement;     

(ii) the Danaher Common Shares issuable to the Fluke Stockholders       
pursuant to the Merger Agreement and under the Stock Option Plans shall     
have been approved for listing on the NYSE, subject to official notice of   
issuance;                                                                   

(iii) no litigation brought by a Governmental Entity shall be pending,  
and no litigation shall be threatened by any Governmental Entity, which     
seeks to enjoin or prohibit the consummation of the Merger, and no          
temporary restraining order, preliminary or permanent injunction or other   
order issued by any court of competent jurisdiction or other legal          
restraint or prohibition preventing the consummation of the Merger shall be 
in effect;                                                                  

 (iv) the Registration Statement shall have been declared effective by the
Commission under the Securities Act, and no stop order suspending the       
effectiveness of the Registration Statement shall have been issued by the   
Commission, and no proceedings for that purpose shall have been initiated   
or, to the knowledge of Danaher or Fluke, threatened by the Commission;     

(v) the applicable waiting period (and any extension thereof) under the 
HSR Act shall have expired or been terminated; and                          

(vi) other than the filing of merger documents in accordance with the   
WBCA, all authorizations, consents, waivers, orders or approvals required   
to be obtained, and all filings, notices or declarations required to be     
made, by Danaher, Sub and Fluke prior to the consummation of the Merger and 
the transactions contemplated hereunder shall have been obtained from, and  
made with, all required Governmental Entities except for such               
authorizations, consents, waivers, orders, approvals, filings, notices or   
declarations the failure to obtain or make which would not have a material  
adverse effect, at or after the Effective Time, on the Surviving            
Corporation or Danaher.                                                     

Additional Conditions to Obligations of Danaher and Sub. The Merger         
Agreement also makes the obligations of Danaher and Sub to effect the Merger    
subject to the following conditions:                                            

(i) each of the representations and warranties of Fluke contained in the
Merger Agreement shall, as of the Closing Date as though made on and as of  
the Closing Date, be true and correct except for such failures to be true   
and correct as could not, individually or in the aggregate, reasonably be   
expected to result in a material adverse effect on Fluke or Danaher (except 
that where any statement in a representation or warranty is expressly       
qualified by a material adverse effect, such statement shall be true and    
correct in all respects); provided that those representations and           
warranties which address matters only as of a particular date shall remain  
true and correct in all material respects (except that where any statement  
in a representation or warranty expressly includes a standard of            
materiality, such statement shall be true and correct in all respects       
giving effect to such standard) as of such date;                            

 (ii) Fluke shall have performed or complied in all material respects with
the agreements and covenants required by the Merger Agreement to be         
performed or complied with by it on or prior to the Closing Date;           

37  

DEF 14A
47th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 47th
(iii) Fluke shall have obtained the consent or approval of each person  
whose consent or approval shall be required in connection with the Merger   
under all loan or credit agreements, notes, mortgages, indentures, leases   
or other agreements or instruments to which it or any of its Material       
Subsidiaries is a party, except those for which failure to obtain such      
consents and approvals would not have a material adverse effect on Fluke    
prior to or after the Effective Time or a material adverse effect on        
Danaher after the Effective Time;                                           

 (iv) Danaher shall have received the opinion of Wachtell, Lipton, Rosen &
Katz, counsel to Danaher, dated the date of the Proxy Statement, to the     
effect that, on the basis of facts, representations and assumptions set     
forth in such opinion, the Merger will be treated for Federal income tax    
purposes as a reorganization qualifying under the provisions of Section     
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), which 
opinion shall not have been withdrawn or modified in any material respect   
(provided that the issuance of such opinion shall be conditioned on the     
receipt of customary representation letters);                               

(v) Danaher shall have received from Arthur Andersen LLP, as independent
auditors of Danaher, on the date of the Proxy Statement and on the Closing  
Date, letters, in each case dated as of such respective dates, addressed to 
Danaher, in form and substance reasonably acceptable to Danaher and to the  
effect that the business combination to be effected by the Merger is        
required to be accounted for as a pooling-of-interests by Danaher for       
purposes of its consolidated financial statements under generally accepted  
accounting principles and applicable Commission rules and regulations. No   
action shall have been taken by any Governmental Entity or any statute,     
rule, regulation or order enacted, promulgated or issued by any             
Governmental Entity, or any proposal made for any such action by any        
Governmental Entity which is reasonably likely to be put into effect, that  
would prevent Danaher from accounting for the business combination to be    
effected by the Merger as a pooling-of-interests. The conditions described  
in this clause (v) may not be waived by Danaher without Fluke's consent;    
provided that such consent shall not be withheld for any reason other than  
that such waiver would result in a material diminution in the value of the  
consideration to be received by holders of Fluke Common Stock in the        
Merger; and provided, further, that such consent shall not be required if   
the failure to satisfy the conditions described in this clause (v) shall    
have resulted from any act or omission of Fluke;                            

 (vi) Danaher shall have received from each person who may be deemed to be
an affiliate of Fluke (under Rule 145 of the Securities Act or otherwise    
under applicable Commission accounting releases with respect to pooling-of- 
interests accounting treatment) on or prior to the Closing Date a signed    
affiliate agreement substantially in the form attached as an exhibit to the 
Merger Agreement; and                                                       

(vii) The number of Dissenting Shares shall not constitute more than 5% 
of the number of issued and outstanding shares of Fluke Common Stock.       

Additional Conditions to Obligations of Fluke. The Merger Agreement also    
makes the obligations of Fluke to effect the Merger subject to the following    
conditions:                                                                     

(i) each of the representations and warranties of Danaher contained in  
the Merger Agreement shall, as of the Closing Date as though made on and as 
of the Closing Date, be true and correct except for such failures to be     
true and correct as could not, individually or in the aggregate, reasonably 
be expected to result in a material adverse effect on Danaher (except that  
where any statement in a representation or warranty is expressly qualified  
by a material adverse effect, such statement shall be true and correct in   
all respects); provided that those representations and warranties which     
address matters only as of a particular date shall remain true and correct  
in all material respects (except that where any statement in a              
representation or warranty expressly includes a standard of materiality,    
such statement shall be true and correct in all respects giving effect to   
such standard) as of such date;                                             

(ii) Danaher shall have performed or complied in all material respects  
with the agreements and covenants required by the Merger Agreement to be    
performed or complied with by it on or prior to the Closing Date; and       

(iii) Fluke shall have received the opinion of Davis Wright Tremaine,   
counsel to Fluke, dated the date of the Proxy Statement, to the effect      
that, on the basis of facts, representations and assumptions set forth in   

38  

DEF 14A
48th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 48th
such opinion, the Merger will be treated for Federal income tax purposes as 
a reorganization qualifying under the provisions of Section 368(a) of the   
Code, which opinion shall not have been withdrawn or modified in any        
material respect (provided that the issuance of such opinion shall be       
conditioned on the receipt of customary representation letters).            

For purposes of the Merger Agreement "material adverse change" or "material 
adverse effect" means, when used in connection with Fluke or Danaher, any       
change or effect that is or would, individually or in the aggregate,            
reasonably be expected to be materially adverse to the business, assets,        
liabilities, condition (financial or otherwise) or results of operations of     
such party and its subsidiaries taken as a whole.                               

AMENDMENT; TERMINATION; EXPENSES                                                

Termination. The Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of matters presented in        
connection with the Merger by the Fluke Stockholders:                           

(i) by mutual written consent of Danaher and Fluke;                     

(ii) by Danaher, upon a breach of any representation, warranty, covenant
or agreement, on the part of Fluke set forth in the Merger Agreement, or if 
any representation or warranty of Fluke shall have become untrue, in either 
case such that the conditions set forth in the sections of the Merger       
Agreement pertaining to the continued accuracy of Fluke's representations   
and warranties and Fluke's continued performance or compliance with all its 
covenants and agreements contained therein, as the case may be, would be    
incapable of being satisfied by October 31, 1998; provided that, in any     
case, a willful material breach which, to the extent it may be cured, is    
not cured within a reasonable time after notice thereof, shall be deemed to 
cause such conditions to be incapable of being satisfied for purposes of    
termination of the Merger Agreement by Danaher;                             

(iii) by Fluke, upon a breach of any representation, warranty, covenant 
or agreement on the part of Danaher set forth in the Merger Agreement, or   
if any representation or warranty of Danaher shall have become untrue, in   
either case such that the conditions set forth in the sections of the       
Merger Agreement pertaining to the continued accuracy of Danaher's          
representations and warranties and Danaher's continued performance or       
compliance with all its covenants and agreements contained therein, as the  
case may be, would be incapable of being satisfied by October 31, 1998;     
provided that in any case a willful material breach which, to the extent it 
may be cured, is not cured within a reasonable time after notice thereof,   
shall be deemed to cause such conditions to be incapable of being satisfied 
for purposes of termination of the Merger Agreement by Fluke;               

(iv) by either Danaher or Fluke, if any Governmental Entity shall have  
issued an order, decree or ruling or taken any other action permanently     
enjoining, restraining or otherwise prohibiting the consummation of the     
Merger and such order, decree or ruling or other action shall have become   
final and nonappealable;                                                    

(v) by either Danaher or Fluke, if the Merger shall not have occurred by
October 31, 1998, unless the failure to consummate the Merger is the result 
of a breach of a covenant set forth in the Merger Agreement or a material   
breach of any representation or warranty, covenant or agreement set forth   
in the Merger Agreement by the party seeking to terminate the Merger        
Agreement;                                                                  

(vi) by either Danaher or Fluke, if upon a vote at a duly held Fluke    
Stockholders' meeting or any adjournment thereof the requisite approval of  
the Fluke Stockholders shall not have been obtained;                        

 (vii) by Danaher, if (A) the Fluke Board shall withdraw, modify or change
its recommendation of the Merger Agreement or the Merger in any manner      
adverse to Danaher, or Fluke or any of its Material Subsidiaries shall have 
entered into an agreement with respect to any Alternative Transaction, or   
the Fluke Board shall have resolved or announced its intention to do any of 
the foregoing; (B) the Fluke Board shall have recommended to the Fluke      
Stockholders a Takeover Proposal, or shall have resolved or announced its   
intention to do so; or (C) any person (other than Danaher and its           
subsidiaries) shall have acquired beneficial ownership of, or any "group"   
(as such term is defined under Section 13(d) of the Exchange Act and the    
rules and regulations promulgated thereunder) shall have been formed which  
beneficially owns, or has the right to acquire beneficial ownership of,     
more than 10% of the then outstanding shares of capital stock of Fluke;     
provided that certain existing interests shall not give rise to any         
termination right hereunder;                                                

39  

DEF 14A
49th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 49th
(viii) by Fluke, if it shall enter into an agreement with respect to a  
Superior Proposal in accordance with the provision of the Merger Agreement  
(including payment of the Termination Fee and the Expense Fee); and         

(ix) by Fluke, if the Fluke Board so determines by a vote of a majority 
of the members of its entire Board, at any time during the two-day period   
commencing at the close of business on the fifth calendar day (the          
"Determination Date") prior to the date scheduled for Fluke Special         
Meeting, if the average of the daily last sale prices of Danaher Common     
Shares as reported on the NYSE Composite Transactions reporting system (as  
reported in The Wall Street Journal or, if not reported therein, in another 
mutually agreed upon authoritative source) for the fifteen consecutive full 
trading days ending at the close of trading on the Determination Date (the  
"Average Closing Price") shall be less than $31.94; subject, however, to    
the following four sentences. If Fluke elects to exercise its termination   
right described in this clause (ix), it shall give prompt written notice to 
Danaher; provided that such notice of election to terminate may be          
withdrawn at any time within the aforementioned two-day period or during    
the two-day period specified below. During the two-day period commencing    
with its receipt of such notice, Danaher may elect to increase the Exchange 
Ratio to equal a number equal to a quotient (rounded to five decimal        
points), the numerator of which is the product of $31.94 and the Exchange   
Ratio (as then in effect) and the denominator of which is the Average       
Closing Price. If Danaher makes an election contemplated by the preceding   
sentence within such two-day period, it shall give prompt written notice to 
Fluke of such election and the revised Exchange Ratio, whereupon no         
termination shall have occurred and the Merger Agreement shall remain in    
effect in accordance with its terms, except that any references in the      
Merger Agreement to "Exchange Ratio" shall thereafter be deemed to refer to 
the Exchange Ratio as adjusted pursuant to the procedure described above.   
If Danaher declares or effects a stock dividend, reclassification,          
recapitalization, split-up, combination, exchange of shares or similar      
transaction between the date hereof and the Determination Date, the prices  
for the Danaher Common Shares shall be appropriately adjusted for the       
purposes of applying the procedure described above. Fluke may elect not to  
terminate the Merger Agreement even if the Average Closing Price falls      
below $31.94 per share. In determining whether to elect to terminate the    
Merger Agreement in these circumstances, the Fluke Board will take into     
account, consistent with its fiduciary duties, all relevant facts and       
circumstances existing at the time, including, without limitation, whether  
Danaher is prepared to increase the Exchange Ratio, the market for          
comparable stocks in Fluke's industry, the relative value of Danaher Common 
Shares in the market, and the advice of its financial advisors and legal    
counsel. By approving the Merger Agreement, Fluke Stockholders would be     
permitting the Fluke Board to determine, in the exercise of its fiduciary   
duties, to proceed with the Merger even though the value received per share 
of Fluke Common Stock is less than $28.90 because the Average Closing Price 
is below $31.94.                                                            

Effect of Termination. In the event of termination of the Merger Agreement  
by either Fluke or Danaher as provided in the terms of the Merger Agreement     
described above, the Merger Agreement shall forthwith become void and have no   
effect, without any liability or obligation on the part of Danaher, Sub or      
Fluke, other than the provisions of the Merger Agreement relating to Fluke's    
and Danaher's representations as to their engagement of brokers, their          
obligations to comply with the Non-Disclosure Agreement, their agreement as to  
fees and expenses (including the provisions relating to the Termination Fee     
and the Expense Fee described below), and certain general provisions of the     
Merger Agreement and except to the extent that such termination results from    
the willful and material breach by a party of any of its representations,       
warranties, covenants or agreements set forth in the Merger Agreement.          

Amendment. The Merger Agreement may be amended by the parties at any time   
before or after Fluke Stockholder Approval; provided, however, that after       
approval by the Fluke Stockholders there shall not be made any amendment that   
by law requires further approval by the Fluke Stockholders without the further  
approval of such stockholders. The Merger Agreement may not be amended except   
by an instrument in writing signed on behalf of each of the parties.            

Extension; Waiver. At any time prior to the Effective Time, the parties may 
extend the time for the performance of any of the obligations or other acts of  
the other parties, waive any inaccuracies in the representations and            
warranties contained in the Merger Agreement or in any document delivered       
pursuant to the                                                                 

40  

DEF 14A
50th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 50th
Merger Agreement or, except as otherwise provided in the Merger Agreement,      
waive compliance with any of the agreements or conditions contained in the      
Merger Agreement. Any agreement on the part of a party to any such extension    
or waiver shall be valid only if set forth in an instrument in writing, signed  
on behalf of such party. The failure of any party to the Merger Agreement to    
assert any of its rights under the Merger Agreement or otherwise shall not      
constitute a waiver of those rights.                                            

Procedure for Termination, Amendment, Extension or Waiver. A termination of 
or amendment to the Merger Agreement or an extension or waiver pursuant to its  
terms shall, in order to be effective, require in the case of Danaher, Sub and  
Fluke, action by the relevant Board of Directors or the duly authorized         
designee of such Board of Directors.                                            

Termination Fee; Expenses. As set forth in the Merger Agreement, Fluke shall
pay, or cause to be paid, in same day funds to Danaher upon demand an amount    
equal to $17 million (the Termination Fee) plus Danaher's aggregate expenses    
incurred in connection with the Merger Agreement up to $3 million (the Expense  
Fee) (i) if the Merger Agreement is terminated by Danaher as a result of a      
material breach by Fluke of its agreements to hold the Fluke Stockholders       
Meeting and recommend the Merger to Fluke Stockholders; (ii) if Fluke           
terminates the Merger Agreement in order to enter into any agreement with       
respect to any Superior Proposal in accordance with the Merger Agreement;       
(iii) if the Merger Agreement is terminated as a result of any person or        
"group" acquiring beneficial ownership of more than 10% (excluding FCMS and     
ICM Asset Management, Inc. ("ICM")) of the outstanding shares of capital stock  
of Fluke and having refused or failed to deliver to Danaher upon request a      
binding commitment reasonably satisfactory in form and substance to Danaher to  
the effect that such acquisition is purely for investment purposes and that     
such person or the members of such "group" shall not take any action that may   
frustrate the transactions contemplated by the Merger Agreement if, within one  
year after the date of such termination of the Merger Agreement, Fluke          
consummates an Alternative Transaction; provided, that Fluke shall make a       
nonrefundable payment of $5 million (which amount shall be credited to          
Termination Fee or the Expense Fee) upon the termination of the Merger          
Agreement; (iv) if the Merger Agreement is terminated by Danaher as a result    
of the Fluke Board withdrawing, modifying or changing its recommendation in     
any manner adverse to Danaher or recommending a competing Takeover Proposal,    
or as a result of Fluke or any of Fluke's material subsidiaries having entered  
into an agreement with respect to an Alternative Transaction (or the Fluke      
Board having resolved to do any of these things); or (v) if the Merger          
Agreement is terminated following a failure to obtain the requisite approval    
of Fluke Stockholders and at the time of the Fluke Special Meeting there        
existed a Takeover Proposal or a third party shall have indicated its           
intention to make a Takeover Proposal or shall have solicited proxies or        
consents in opposition to the Merger and within one year after the date of      
such termination of the Merger Agreement, Fluke consummates an Alternative      
Transaction.                                                                    

Notwithstanding anything in the Merger Agreement or in the Stock Option     
Agreement to the contrary, the sum of the amounts payable to Danaher pursuant   
to the preceding paragraph and the Option Repurchase Price shall not exceed     
$20 million. If the sum of the amounts to which Danaher would be entitled       
under the preceding paragraph and the value of the Stock Option Agreement is    
greater than $20 million in the aggregate on the date Danaher would be          
entitled to demand payment of the Termination Fee, then the amount which Fluke  
shall be obligated to pay Danaher under the preceding paragraph and the holder  
or holders (on a pro rata basis) of the Stock Option Agreement shall be         
limited to $20 million and Danaher shall indicate to Fluke how such amount      
shall be allocated between the Termination Fee, the Expense Fee and the Option  
Repurchase Price.                                                               

The prevailing party in any legal action undertaken to enforce the Merger   
Agreement or any provision thereof shall be entitled to recover from the other  
party the costs and expenses (including attorneys' and expert witness fees)     
incurred in connection with such action.                                        

41  

DEF 14A
51st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 51st
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

The following discussion is intended only as a summary of certain of the    
material Federal income tax consequences of the Merger and does not purport to  
be a complete analysis or listing of all potential tax effects relative to a    
decision whether to vote for the approval of the Merger. The discussion does    
not address all aspects of Federal income taxation that may be applicable to    
certain Fluke Stockholders subject to special Federal income tax treatment,     
including, without limitation, foreign persons, insurance companies, tax-       
exempt entities, retirement plans and persons who acquired their Fluke Common   
Stock pursuant to the exercise of employee stock options or otherwise as        
compensation. The discussion addresses neither the effect of applicable state,  
local or foreign tax laws, nor the effect of any Federal tax laws other than    
those pertaining to Federal income tax.                                         

Fluke has received an opinion from Davis Wright Tremaine and Danaher has    
received an opinion from Wachtell, Lipton, Rosen & Katz to the effect that, if  
the Merger occurs in accordance with the Merger Agreement, the Merger will      
constitute a reorganization within the meaning of Section 368(a) of the Code    
for Federal income tax purposes. Such opinions are based on the Code,           
regulations and rulings now in effect or proposed thereunder, current           
administrative rulings and practice and judicial precedent, all of which are    
subject to change. Any such change, which may or may not be retroactive, could  
alter the tax consequences discussed herein. The opinions are also based on     
certain assumptions regarding the factual circumstances that will exist at the  
Effective Time, including, without limitation, certain representations made by  
Danaher, Fluke and certain Fluke Stockholders. If any of these factual          
assumptions is inaccurate, the tax consequences of the Merger could differ      
from those described herein. The discussion below assumes that the Fluke        
Stockholders hold their shares of Fluke Common Stock as capital assets within   
the meaning of Section 1221 of the Code.                                        

As a reorganization under Section 368(a) of the Code, no gain or loss will  
be recognized by the Fluke Stockholders with respect to the Danaher Common      
Shares received in the Merger. The tax basis of the Danaher Common Shares       
received by a Fluke Stockholder in the Merger will be equal to the tax basis    
of the shares of Fluke Common Stock exchanged therefor, reduced by any amount   
of basis allocable to fractional share interests for which cash is received.    
For purposes of determining whether or not gain or loss on the subsequent       
disposition of Danaher Common Shares received in the Merger is long-term or     
short-term, the holding period of such Danaher Common Shares received by the    
Fluke Stockholders will include the holding period of the shares of Fluke       
Common Stock exchanged therefor.                                                

The receipt of cash in lieu of a fractional Danaher Common Share by a Fluke 
Stockholder pursuant to the Merger will result in taxable gain or loss to such  
stockholder for Federal income tax purposes based on the difference between     
the amount of cash received by such stockholder and such stockholder's basis    
in such fractional share as set forth above. Such gain or loss will be a        
capital gain or loss.                                                           

The Merger Agreement provides that neither Danaher nor Fluke is obligated to
consummate the Merger unless Danaher and Fluke shall have received the          
opinions from Wachtell, Lipton, Rosen & Katz, counsel to Danaher, and Davis     
Wright Tremaine, counsel to Fluke, respectively, substantially to the effect    
that under applicable law, for Federal income tax purposes, the Merger will     
constitute a reorganization under Section 368(a) of the Code.                   

THE FOREGOING DISCUSSION OF MATERIAL FEDERAL INCOME TAX CONSEQUENCES IS FOR 
GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. THE OPINIONS OF        
WACHTELL, LIPTON, ROSEN & KATZ AND DAVIS WRIGHT TREMAINE ARE NOT BINDING ON     
THE INTERNAL REVENUE SERVICE. BECAUSE OF THE COMPLEXITY OF THE TAX LAWS, AND    
BECAUSE THE TAX CONSEQUENCES OF ANY PARTICULAR STOCKHOLDER MAY BE AFFECTED BY   
MATTERS NOT DISCUSSED HEREIN, EACH FLUKE STOCKHOLDER IS URGED TO CONSULT HIS    
OWN TAX ADVISER WITH RESPECT TO HIS OWN PARTICULAR CIRCUMSTANCES AND WITH       
RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM, INCLUDING THE    
APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS, ESTATE TAX LAWS  
AND PROPOSED CHANGES IN APPLICABLE TAX LAWS.                                    

42  

DEF 14A
52nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 52nd
THE COMPANIES 

BUSINESS OF DANAHER                                                             

Danaher, a Delaware corporation, conducts its operations through two        
business segments: Tools and Components and Process/Environmental Controls.     
The Tools and Components segment is one of the largest domestic producers and   
distributors of general purpose mechanics' hand tools and automotive specialty  
tools. Other products manufactured by this segment include tool boxes and       
storage devices, diesel engine retarders, wheel service equipment, drill        
chucks, custom designed headed tools and components, hardware and components    
for the power generation and transmission industries, high quality precision    
socket screws, fasteners, and high quality miniature precision parts. The       
Process/Environmental Controls segment produces and sells underground storage   
tank leak detection systems and temperature, level and position sensing         
devices, power switches and controls, communication line products, power        
protection products, liquid flow measuring devices, telecommunications          
products, quality assurance products and systems, and electronic and            
mechanical counting and controlling devices. These products are distributed by  
the Company's sales personnel and independent representatives to original       
equipment manufacturers, distributors and other end users. The principal        
executive offices of Danaher are located at 1250 24th Street, N.W.,             
Washington, D.C. 20037, and its telephone number is (202) 828-0850.             

BUSINESS OF FLUKE                                                               

Fluke was founded in 1948 and incorporated under the laws of the State of   
Washington on October 7, 1953. Fluke is engaged in the design, manufacture and  
marketing of compact, professional electronic test tools. Fluke's principal     
products are portable instruments that measure voltage, current, power          
quality, frequency, temperature, pressure and other key functional parameters   
of electronic equipment. The principal executive offices of Fluke are located   
at 6920 Seaway Boulevard, Everett, Washington 98203, and its telephone number   
is (425) 347-6100.                                                              

43  

DEF 14A
53rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 53rd
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION  

The following unaudited pro forma combined financial information should be  
read in conjunction with the financial statements, including the notes          
thereto, of Danaher and Fluke, which are incorporated by reference in this      
Proxy Statement/Prospectus. The pro forma information is presented for          
illustration purposes only and is not necessarily indicative of the operating   
results or financial position that would have occurred if the Merger had been   
consummated in accordance with the assumptions set forth below, nor is it       
necessarily indicative of future operating results or financial position.       

UNAUDITED PRO FORMA COMBINED BALANCE SHEET  

The following unaudited pro forma combined balance sheet presents, under the
pooling-of-interests accounting method, the consolidated balance sheet of       
Danaher as of December 31, 1997 combined with the balance sheet of Fluke as of  
January 23, 1998.                                                               

                                                                [Download Table]

                                                      PRO FORMA     PRO FORMA  
                                 DANAHER     FLUKE    ADJUSTMENT     BALANCE   
                                ----------  --------  ----------    ---------- 
                                             (IN THOUSANDS)                    
                                                                               
ASSETS                                                                         
CURRENT ASSETS:                                                                
  Cash & Equivalents........... $   33,317  $ 37,504                $   70,821 
  Accounts Receivable..........    322,600    81,258                   403,858 
  Inventories..................    209,416    55,706                   265,122 
  Prepaids & Other.............     53,006    39,246                    92,252 
                                ----------  --------                ---------- 
    Total Current Assets.......    618,339   213,714                   832,053 
  Plant, Property & Equipment,                                                 
   net.........................    335,223    68,265                   403,488 
  Other Assets.................     72,739    12,243                    84,982 
  Excess Cost over net assets,                                                 
   net.........................    853,416     9,936                   863,352 
                                ----------  --------                ---------- 
    Total Assets............... $1,879,717  $304,158                $2,183,875 
                                ==========  ========                ========== 
LIABILITIES                                                                    
CURRENT LIABILITIES:                                                           
  Note Payables, current                                                       
   portion..................... $   35,527  $    383                $   35,910 
  Accounts Payable.............    135,190    16,876                   152,066 
  Accrued Expenses.............    353,518    38,803   $ 25,000 (2)    417,321 
                                ----------  --------   --------     ---------- 
    Total Current Liabilities..    524,235    56,062     25,000        605,297 
  Other Long Term Liabilities..    275,881    25,369                   301,250 
  Long-Term Debt...............    162,720       389                   163,109 
  Shareholders' Equity:                                                        
  Common Stock.................      1,286     4,589     (4,500)         1,375 
  APIC.........................    335,466    74,407      4,500        414,373 
  Cumulative adjustment &                                                      
   other.......................     (6,122)   (7,137)                  (13,259)
  Retained Earnings............    655,692   150,479    (25,000)(2)    781,171 
  Treasury Stock...............    (69,441)        0                   (69,441)
                                ----------  --------   --------     ---------- 
    Total Shareholders'                                                        
     Equity....................    916,881   222,338    (25,000)     1,114,219 
                                ----------  --------   --------     ---------- 
      Total.................... $1,879,717  $304,158   $      0     $2,183,875 
                                ==========  ========   ========     ========== 

See accompanying notes to the unaudited pro forma combined financial  
information.  

44  

DEF 14A
54th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 54th
UNAUDITED PRO FORMA COMBINED STATEMENTS OF EARNINGS 

The following unaudited pro forma combined statements of earnings present,  
under the pooling-of-interests accounting method, the consolidated statements   
of earnings of Danaher for the fiscal years ended December 31, 1997, December   
31, 1996 and December 31, 1995 combined with the statements of earnings of      
Fluke for the twelve months ended December 31, 1997, December 31, 1996 and      
December 31, 1995.                                                              

                                                                [Download Table]

                                YEAR ENDED DECEMBER 31, 1997                   
                                ------------------------------                 
                                    DANAHER       FLUKE(1)    PRO FORMA RESULTS
                                --------------- -------------------------------
                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)     
                                                                               
Net Sales......................      $2,050,968      $441,034    $2,492,002    
Cost of Sales..................       1,382,475       215,956     1,598,431    
SG & A.........................         401,608       190,907       592,515    
Total Expenses.................       1,784,083       406,863     2,190,946    
                                     ----------      --------    ----------    
Operating Profit...............         266,885        34,171       301,056    
Interest expense, net..........          13,104           107        13,211    
                                     ----------      --------    ----------    
Earnings before Taxes..........         253,781        34,064       287,845    
Taxes..........................          98,975        12,264       111,239    
                                     ----------      --------    ----------    
Net Earnings...................      $  154,806      $ 21,800    $  176,606    
                                     ==========      ========    ==========    
EPS--Diluted...................      $     1.28      $   1.15    $     1.28    
EPS--Basic.....................      $     1.32      $   1.20    $     1.32    
Average Shares--Diluted........         120,512        19,031       137,731    
Average Shares--Basic..........         117,538        18,195       134,000    

                                                                [Download Table]

                               YEAR ENDED DECEMBER 31, 1996                   
                               ----------------------------                   
                                   DANAHER       FLUKE(1)    PRO FORMA RESULTS
                               --------------- -------------------------------
                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)     
                                                                              
Net Sales.....................      $1,811,878      $421,315    $2,233,193    
Cost of Sales.................       1,219,388       190,305     1,409,693    
SG & A........................         366,354       189,740       556,094    
Total Expenses................       1,585,742       380,045     1,965,787    
                                    ----------      --------    ----------    
Operating Profit..............         226,136        41,270       267,406    
Interest expense, net.........          16,376           437        16,813    
                                    ----------      --------    ----------    
Earnings from continuing                                                      
 operations before Taxes......         209,760        40,833       250,593    
Taxes.........................          81,801        14,435        96,236    
                                    ----------      --------    ----------    
Earnings from continuing                                                      
 operations...................         127,959        26,398       154,357    
Discontinued Operations.......          79,811             0        79,811    
                                    ----------      --------    ----------    
Net Earnings..................      $  207,770      $ 26,398    $  234,168    
                                    ==========      ========    ==========    
EPS from continuing                                                           
 operations--Diluted..........      $     1.07      $   1.47    $     1.13    
EPS from continuing                                                           
 operations--Basic............      $     1.09      $   1.52    $     1.16    
Discontinued Operations EPS--                                                 
 Diluted......................      $     0.67      $   0.00    $     0.59    
Discontinued Operations EPS--                                                 
 Basic........................      $     0.68      $   0.00    $     0.60    
EPS--Net Earnings:                                                            
  Diluted.....................      $     1.73      $   1.47    $     1.72    
  Basic.......................      $     1.77      $   1.52    $     1.76    
Average Shares--Diluted.......         119,910        17,920       136,124    
Average Shares--Basic.........         117,246        17,358       132,951    

See accompanying notes to the unaudited pro forma combined financial  
information.  

45  

DEF 14A
55th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 55th
                                                                [Download Table]

                               YEAR ENDED DECEMBER 31, 1995                   
                               ------------------------------                 
                                   DANAHER       FLUKE(1)    PRO FORMA RESULTS
                               --------------- -------------------------------
                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)     
                                                                              
Net Sales..................... $     1,486,769 $     412,694    $1,899,463    
Cost of Sales.................       1,039,622       192,382     1,232,004    
SG & A........................         266,890       184,677       451,467    
Total Expenses................       1,306,512       376,959     1,683,471    
                               --------------- -------------    ----------    
Operating Profit..............         180,257        35,735       215,992    
Interest expense, net.........           7,198         1,531         8,729    
                               --------------- -------------    ----------    
Earnings from continuing                                                      
 operations before Taxes......         173,059        34,204       207,263    
Taxes.........................          67,293        11,681        78,974    
                               --------------- -------------    ----------    
Earnings from continuing                                                      
 operations...................         105,766        22,523       128,289    
Discontinued Operations.......           2,550             0         2,550    
                               --------------- -------------    ----------    
Net Earnings.................. $       108,316 $      22,523    $  130,839    
                               =============== =============    ==========    
EPS from continuing                                                           
 operations--Diluted.......... $          0.88 $        1.28    $     0.95    
EPS from continuing                                                           
 operations--Basic............ $          0.90 $        1.32    $     0.97    
Discontinued Operations EPS--                                                 
 Diluted...................... $          0.02 $        0.00    $     0.02    
Discontinued Operations EPS--                                                 
 Basic........................ $          0.02 $        0.00    $     0.02    
EPS--Net Earnings:                                                            
 Diluted...................... $          0.90 $        1.28    $     0.96    
 Basic........................ $          0.92 $        1.32    $     0.99    
Average Shares--Diluted.......         119,726        17,639       135,685    
Average Shares--Basic.........         117,324        17,074       132,772    

NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION (UNAUDITED) 

(1) Fluke's fiscal year has historically ended in April. The pro forma          
information is presented in accordance with Danaher's fiscal year which 
ends December 31. Fluke's balances for twelve month periods ending      
 approximately one month later than the Danaher periods have been included
  in these combined statements. In the opinion of Danaher's management, this
difference is not material.                                             

(2) Merger expenses of approximately $25 million are based on a preliminary     
estimate and are made up of approximately equal amounts related to: (i) 
transaction costs associated with the Merger; and (ii) integrating and  
implementing efficiencies associated with information, operational and  
administrative systems.                                                 

(3) Earnings per share includes all Fluke common shares (or common shares and   
  equivalents, as appropriate) based on the exchange ratio of 0.90478 shares
of Danaher for each Fluke share (or equivalent).                        

46  

DEF 14A
56th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 56th
COMPARISON OF STOCKHOLDER RIGHTS  

Upon consummation of the Merger, Fluke Stockholders will become holders of  
Danaher Common Shares, and their rights will thereafter be governed by the      
Delaware General Corporation Law ("DGCL") instead of the WBCA, and by the       
certificate of incorporation of Danaher (the "Danaher Certificate of            
Incorporation") and the By-Laws of Danaher (the "Danaher By-Laws"), as opposed  
to the Fluke Articles and the Fluke Bylaws.                                     

The following is a summary of certain material differences between the      
rights of Danaher Stockholders, on one hand, and Fluke Stockholders, on the     
other hand. These differences arise from differences between the DGCL and the   
WBCA, and between the Danaher Certificate of Incorporation and the Danaher By-  
Laws and the Fluke Articles and the Fluke Bylaws.                               

The following does not purport to be a complete statement of the rights of  
the Danaher stockholders under the DGCL, the Danaher Certificate of             
Incorporation and the Danaher By-Laws as compared with the rights of Fluke      
Stockholders under the WBCA, the Fluke Articles and the Fluke Bylaws. The       
identification of certain specific differences is not meant to indicate that    
other equally or more significant differences do not exist. The following       
summary is qualified in its entirety by reference to the DGCL, the WBCA and     
the full text of the charter and bylaw documents of each of Danaher and Fluke.  
For information as to how such documents may be obtained, see "Available        
Information."                                                                   

SIZE AND CLASSIFICATION OF THE BOARD OF DIRECTORS                               

Danaher. The DGCL provides that the board of directors of a Delaware        
corporation shall consist of one or more directors as fixed by the              
corporation's certificate of incorporation or bylaws. The Danaher Certificate   
of Incorporation provides for a board of directors comprised of not less than   
three persons, which number may be determined by the Danaher Board. Danaher     
currently has nine directors. As permitted under the DGCL, the Danaher Board    
is classified into three classes which are as nearly equal in number as         
reasonably possible. Directors in each class serve for a three-year term, and   
elections are staggered such that one class is elected each year.               

Fluke. The WBCA provides that the board of directors of a Washington        
corporation shall consist of one or more directors as fixed by the              
corporation's articles of incorporation or bylaws. The Fluke Bylaws provide     
for a board of directors comprised of twelve directors. As permitted under the  
WBCA, the Fluke Board is classified into three classes which are as equal in    
number as possible. Directors in each class serve for a three-year term, and    
elections are staggered such that one class is elected each year. The WBCA      
provides for cumulative voting for directors, unless a corporation has opted    
out of such provision. Fluke has not opted out of this provision.               

REMOVAL OF DIRECTORS                                                            

Danaher. The DGCL provides that a director or the entire board of directors 
may be removed, with or without cause, by the holders of a majority of the      
shares then entitled to vote at an election of directors. However, in the case  
of a corporation whose board is classified, the directors may be removed only   
for cause unless the certificate of incorporation provides otherwise. The       
Danaher Certificate of Incorporation does not provide that directors may be     
removed without cause.                                                          

Fluke. The WBCA provides that a corporation's shareholders may remove one or
more directors with or without cause unless the articles of incorporation       
provide that directors may be removed only for cause. The Fluke Articles        
provide that any director may be removed only for cause and only by the         
affirmative vote of the holders of 80% of the voting power of the outstanding   
shares of Fluke Common Stock.                                                   

47  

DEF 14A
57th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 57th
SPECIAL MEETINGS OF STOCKHOLDERS                                                

Danaher. Under the DGCL, a special meeting of stockholders may be called by 
the board of directors or by any other person authorized to do so in the        
certificate of incorporation or the bylaws. The Danaher Certificate of          
Incorporation provides that a special meeting of stockholders may be called     
only by a majority of the entire Danaher Board, a majority of the stockholders  
or by Danaher's Chairman of the Board. Business transacted at any special       
meeting is limited to the purposes stated in the notice of the special          
stockholders meeting given to stockholders. The DGCL and the Danaher By-Laws    
require notice of stockholders meetings to be sent to all stockholders of       
record entitled to vote thereon not less than 10 nor more than 60 days prior    
to the date of the meeting.                                                     

Fluke. Under the WBCA, a special meeting of shareholders may be called by a 
corporation's board of directors or other persons authorized by the             
corporation's articles of incorporation or bylaws, or, unless limited by the    
articles of incorporation, on written demand of holders of at least 10% of all  
votes entitled to be cast on any issue proposed to be considered at the         
proposed special meeting. The Fluke Articles provide that special meetings of   
shareholders may be called only by the Fluke Board. The Fluke Bylaws require    
that notice of such special meetings be delivered to the Fluke Stockholders by  
the Secretary within 30 days after the receipt by the Secretary of a request    
from the Fluke Board. The WBCA provides that notice of a shareholders meeting   
to act on an amendment to the articles of incorporation, a plan of merger or a  
share exchange or certain other transactions must be given not less than 20     
nor more than 60 days prior to the date of the meeting. The Fluke Bylaws        
require that any proposal brought before an annual meeting and any director     
nomination must be delivered to the corporation at least 70 days before the     
annual meeting or the election of directors. In addition, Fluke Stockholders    
must follow the procedure set forth for proposals and director nominations in   
the Fluke Bylaws.                                                               

AMENDMENT TO CERTIFICATE/ARTICLES OF INCORPORATION                              

Danaher. Under the DGCL, amendments to a corporation's certificate of       
incorporation require the approval of the board of directors and stockholders   
holding a majority of the outstanding stock of such class entitled to vote on   
such amendment as a class, unless a different proportion is specified in the    
certificate of incorporation or by other provisions of the DGCL. The Danaher    
Certificate of Incorporation provides that it may be amended in the manner      
prescribed by statute.                                                          

Fluke. The WBCA authorizes a corporation's board of directors to make       
various changes of an administrative nature to the corporation's articles of    
incorporation without shareholder action. Such changes include a change to the  
corporate name, changes to the number of outstanding shares in order to         
effectuate a stock split or stock dividend in the corporation's shares and      
changes to or elimination of provisions with respect to the par value of the    
corporation's stock. The WBCA requires that other amendments to a               
corporation's articles of incorporation must be recommended to the              
shareholders by the board of directors, unless the board determines that,       
because of a conflict of interest or other special circumstances, it should     
make no recommendation and communicates the basis for its determination to the  
shareholders. Under the WBCA, such amendments must be approved by each voting   
group entitled to vote thereon by a majority of all the votes entitled to be    
cast by that voting group, unless another proportion is specified in the        
articles of incorporation, by the board of directors as a condition to its      
recommendation, or by the provisions of the WBCA. The Fluke Articles do not     
specify another proportion other than requiring that approval by 80% of the     
voting stock must be obtained to amend or adopt any provision inconsistent      
with specified Articles of the Fluke Articles, provided that the affirmative    
vote of only 66 2/3% of the voting stock is required if such amendment or       
adoption of a new provision is approved by a majority of the Fluke Board, with  
the concurrence of a majority of the Continuing Directors (as hereinafter       
defined).                                                                       

PROVISIONS RELATING TO ACQUISITIONS AND BUSINESS COMBINATIONS                   

Danaher. Section 203 of the DGCL prohibits a Delaware corporation from      
engaging in any "business combination" with any person who owns 15% or more of  
a corporation's voting stock (i.e., an "interested stockholder") for a period   
of three years following the date that such person became an interested         
stockholder,                                                                    

48  

DEF 14A
58th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 58th
unless: (i) the corporation's board of directors has approved, prior to the     
date on which such stockholder became an interested stockholder, either the     
business combination or the transaction that resulted in the person becoming    
an interested stockholder; (ii) upon consummation of the transaction that       
resulted in the stockholder becoming an interested stockholder, such            
stockholder owned at least 85% of the corporation's voting stock outstanding    
at such time (excluding shares owned by persons who are both directors and      
officers and shares owned by employee stock plans in which participants do not  
have the right to determine confidentially whether shares will be tendered in   
a tender or exchange offer); or (iii) on or after the date on which such        
stockholder became an interested stockholder, the business combination is       
approved by the board of directors and authorized by the affirmative vote (at   
an annual or special meeting and not by written consent) of at least 66 2/3%    
of the outstanding voting stock not owned by the interested stockholder.        

For purposes of determining whether a person is the "owner" of 15% or more  
of a corporation's voting stock for purposes of Section 203 of the DGCL,        
ownership is defined broadly to include the right, directly or indirectly, to   
acquire the stock or to control the voting or disposition of the stock. A       
"business combination" is also defined broadly to include: (i) mergers and      
sales or other dispositions of 10% or more of the assets of a corporation with  
or to an interested stockholder; (ii) certain transactions resulting in the     
issuance or transfer to the interested stockholder of any stock of the          
corporation or its subsidiaries; (iii) certain transactions that would result   
in an increase in the proportionate share of a corporation's or its             
subsidiaries' stock owned by the interested stockholder; and (iv) any receipt   
by the interested stockholder of the benefit, directly or indirectly (except    
proportionately as a stockholder), of any loans, advances, guarantees, pledges  
or other financial benefits provided by or through the corporation or any of    
its subsidiaries.                                                               

A Delaware corporation may elect not to be governed by Section 203 by a     
provision contained in its original certificate of incorporation or an          
amendment thereto or to the bylaws, which amendment must be approved by a       
majority of the shares entitled to vote and may not be further amended by the   
board of directors. Such an amendment is not effective until 12 months          
following its adoption. Danaher has not expressly made such an election in its  
original Certificate of Incorporation or amendment thereto or in the Danaher    
By-Laws.                                                                        

Fluke. Chapter 23B.19 of the WBCA, which applies to Washington corporations 
which have a class of voting stock registered with the Commission under the     
Exchange Act, prohibits a "target corporation," with certain exceptions, from   
engaging in certain "significant business transactions" with a person or group  
of persons which beneficially owns 10% or more of the voting securities of the  
target corporation (i.e., an "Acquiror") for a period of five years after such  
acquisition, unless the transaction or acquisition of shares is approved by a   
majority of the members of the target corporation's board of directors prior    
to the time of acquisition. Such prohibited transactions include, among other   
things, a merger or consolidation with, disposition of assets to, or issuance   
or redemption of stock to or from, the Acquiror, termination of 5% or more of   
the employees of the target corporation as a result of the Acquiror's           
acquisition of 10% or more of the shares, or allowing the Acquiror to receive   
any disproportionate benefit as a shareholder. After the five-year period, a    
"significant business transaction" may take place if it complies with certain   
"fair price" provisions of the statute. A corporation may not "opt out" of      
this statute and, as such, Fluke is subject to it. The Merger will not be       
subject to the provisions of the statute because the Fluke Board has approved   
the Merger Agreement and the transactions contemplated thereby.                 

The Fluke Articles contain a provision requiring the affirmative vote of 80%
of the votes entitled to be cast by the holders of all shares of Fluke          
entitled to vote generally in the election of directors for certain business    
transactions, if such transactions are out of the ordinary course of business   
and inconsistent with past practice, with any person or group of persons which  
is the beneficial owner, directly or indirectly, of shares of Fluke having 10%  
or more of the votes entitled to be cast by the holders of all outstanding      
shares of voting stock (or any person or group of persons which had such        
status at any time in the preceding two years). Notwithstanding the foregoing,  
such business transaction will only require the affirmative vote otherwise      
required if the business transaction is approved by a majority of the           
directors who were members of the Fluke Board on May 29, 1986, or who were      
elected to the Fluke Board upon the recommendation of a majority of persons     
who were on the                                                                 

49  

DEF 14A
59th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 59th
Fluke Board on May 29, 1986, voting separately as a class ("Continuing          
Directors"). A majority of the Continuing Directors have approved the Merger.   

MERGERS, ACQUISITIONS AND OTHER TRANSACTIONS                                    

Danaher. Under the DGCL, a merger, consolidation or sale of all or          
substantially all of a corporation's assets must be approved by the board of    
directors and by a majority of the outstanding stock of the corporation         
entitled to vote thereon, provided that no vote of stockholders of a            
constituent corporation surviving a merger is required (unless the corporation  
provides otherwise in its certificate of incorporation) if (i) the merger       
agreement does not amend the certificate of incorporation of the surviving      
corporation, (ii) each share of stock of the surviving corporation outstanding  
before the merger is an identical outstanding or treasury share after the       
merger, and (iii) either no shares of common stock of the surviving             
corporation are to be issued or delivered pursuant to the merger or, if such    
common stock will be issued or delivered, it will not increase the number of    
shares of common stock outstanding immediately prior to the merger by more      
than 20%.                                                                       

Fluke. Under the WBCA, a merger, consolidation or sale of substantially all 
of a corporation's assets other than in the regular course of business must be  
approved by the affirmative vote of a majority of directors and by two-thirds   
of all votes entitled to be cast by each voting group entitled to vote as a     
separate group, unless another proportion (but not less than a majority of all  
votes entitled to be cast) is specified in the articles of incorporation. The   
Fluke Articles provide that the Fluke Board may sell, lease or exchange all of  
Fluke's property and assets upon authorization by the affirmative vote of the   
holders of at least two-thirds of the voting stock.                             

In addition, Fluke amended the Fluke Rights Agreement so that the entering  
into of the Merger Agreement, the Stockholders Support Agreements and the       
Stock Option Agreement and the consummation of the Merger and the other         
transactions contemplated thereby do not and will not result in the ability of  
any person to exercise any Right under the Fluke Rights Agreement or enable or  
require the Rights to be separated from the shares of Fluke Common Stock to     
which they are attached or to be triggered or become exercisable, and so that   
the Fluke Rights Agreement and the Rights will terminate upon consummation of   
the Merger.                                                                     

ACTION WITHOUT A MEETING                                                        

Danaher. The DGCL authorizes stockholder action without a meeting, unless   
otherwise provided in a corporation's certificate of incorporation.             

Fluke. Under the WBCA, shareholder action may be taken without a meeting    
only if written consents setting forth such action are signed by all holders    
of outstanding shares entitled to vote thereon.                                 

APPRAISAL OR DISSENTERS' RIGHTS                                                 

Danaher. Under the DGCL, dissenters' rights of appraisal are available to a 
stockholder of a corporation only in connection with certain mergers or         
consolidations involving such corporation. Appraisal rights are not available   
under the DGCL if the corporation's stock is either (i) listed on a national    
securities exchange (as the Danaher Common Shares are) or designated as a       
national market system security on an interdealer quotation system by the       
National Association of Securities Dealers, Inc. (the "NASD") or (ii) held of   
record by more than 2,000 stockholders; provided, however, that appraisal       
rights will be available if the merger or consolidation requires stockholders   
to exchange their stock for anything other than (a) shares of the surviving     
corporation, (b) shares of another corporation that will be listed on a         
national securities exchange, designated as a national market system security   
on an interdealer quotation system by the NASD or held of record by more than   
2,000 stockholders, (c) cash in lieu of fractional shares, or (d) a             
combination of such shares and cash in lieu of fractional shares.               
Additionally, no appraisal rights are available if the corporation is the       
surviving corporation, and no vote of its stockholders is required for the      
merger.                                                                         

Fluke. Under the WBCA, a shareholder of a Washington corporation may        
exercise dissenters' rights in connection with a plan of merger providing for   
a shareholder vote, a plan of exchange involving the acquisition                

50  

DEF 14A
60th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 60th
of the corporation's shares providing for a shareholder vote, a sale or         
exchange of all, or substantially all, of the property of the corporation       
other than in the usual and regular course of business, providing for a         
shareholder vote, a reverse stock split that results in the shareholder         
becoming a fractional holder, and any corporate action taken by shareholder     
vote for which the articles of incorporation, bylaws or resolution of the       
board of directors provide for dissenters' rights. Accordingly, Fluke           
Stockholders have the right to dissent from the Merger and receive payment of   
the fair value of their shares of Fluke Common Stock. See "Appraisal Rights."   

INDEMNIFICATION OF DIRECTORS AND OFFICERS                                       

Danaher. Under the DGCL, a corporation is permitted to adopt a provision in 
its certificate of incorporation reducing or eliminating the liability of a     
director to the corporation or its stockholders for monetary damages for        
breach of fiduciary duty as a director, provided that such liability does not   
arise from certain proscribed conduct (e.g., intentional misconduct or breach   
of the duty of loyalty). The Danaher Certificate of Incorporation provides for  
certain specified limitations on a director's liability to the fullest extent   
permitted under the DGCL. In addition, the DGCL grants each Delaware            
corporation the power to indemnify any of its officers, directors, employees    
or agents who are parties to any action, suit or proceeding by reason of the    
fact that he or she is or was a director, officer, employee or agent of the     
corporation or is or was serving at the request of the corporation as a         
director, officer, employee or agent of another entity, provided that such      
officer, director, employee or agent acted in good faith and in a manner he or  
she reasonably believed to be in or not opposed to the best interests of the    
corporation, and, with respect to a criminal proceeding, had no reasonable      
cause to believe his or her conduct was unlawful. To the extent a director,     
officer, employee or agent is successful in the defense of such an action,      
suit or proceeding, the corporation is required by the DGCL to indemnify such   
person for reasonable expenses incurred thereby. The Danaher By-Laws provide    
for exculpation and indemnification of officers and directors to the extent     
permitted by the DGCL.                                                          

Fluke. The WBCA provides that a corporation's articles of incorporation may 
include a provision that eliminates or limits the personal liability of a       
director to the corporation or its shareholders for monetary damages for        
conduct as a director. However, the provision may not eliminate or limit the    
liability of a director for acts or omissions that involve intentional          
misconduct by the director or a knowing violation of law by the director, for   
unlawful distributions, or for any transaction from which the director will     
personally receive a benefit in money, property or services to which the        
director is not legally entitled. The Fluke Articles provide for the            
limitation of director liability to the full extent permitted by the WBCA. In   
addition, under the WBCA, if authorized by the articles of incorporation or a   
bylaw adopted or ratified by the shareholders or by a resolution adopted or     
ratified by the shareholders, a corporation has the power to indemnify a        
director or officer made a party to a proceeding, or advance or reimburse       
expenses incurred in a proceeding, under any circumstances, except that no      
such indemnification shall be allowed on account of (i) acts or omissions of a  
director or officer finally adjudged to be intentional misconduct or a knowing  
violation of the law, (ii) conduct of a director or officer finally adjudged    
to be an unlawful distribution, or (iii) any transaction with respect to which  
it was finally adjudged that such director or officer personally received a     
benefit in money, property or services to which the director or officer was     
not legally entitled. Unless limited by the corporation's articles of           
incorporation, Washington law requires indemnification if the director or       
officer is wholly successful on the merits of the action or otherwise. Any      
indemnification of a director must be reported to the shareholders in writing.  
The Fluke Bylaws provide for the indemnification of a director or officer to    
the full extent permitted by applicable law.                                    

DIVIDENDS                                                                       

Danaher. A Delaware corporation may declare and pay dividends out of its    
surplus or, if it has no surplus, out of any net profits for the fiscal year    
in which the dividend was declared or for the preceding fiscal year in which    
the dividend was declared (provided that such payment will not reduce capital   
below the amount of capital represented by all classes of shares having a       
preference upon the distribution of assets).                                    

Fluke. Under the WBCA, a corporation may make a distribution in cash or in  
property to its shareholders upon the authorization of its board of directors   
unless, after giving effect to such distribution, (i) the corporation           

51  

DEF 14A
61st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 61st
would be unable to pay its debts as they become due in the usual course of      
business, or (ii) the corporation's total assets would be less than the sum of  
its total liabilities plus the amount that would be needed, if the corporation  
were to be dissolved at the time of the distribution, to satisfy the            
preferential rights of shareholders whose preferential rights are superior to   
those receiving the distribution.                                               

For a comparison of dividends historically paid by each of Danaher and Fluke
see "Market Price and Dividend Data."                                           

DESCRIPTION OF DANAHER CAPITAL STOCK  

As of June 5, 1998, the authorized capital stock of Danaher consisted of:   
(i) 300,000,000 Danaher Common Shares, of which 117,153,940 were issued and     
outstanding, 11,595,212 were issued and held in treasury, and 8,645,744 were    
reserved for issuance pursuant to options outstanding under stock incentive     
plans (with 3,987,320 additional Danaher Common Shares available for issuance   
under such plans), (ii) 15,000,000 Preferred Shares, without par value          
("Preferred Shares"), none of which has been issued or reserved for issuance.   
Danaher announced a two-for-one split of the Danaher Common Shares, which was   
approved by the Danaher Stockholders on May 5, 1998 and was effective as of     
June 1, 1998.                                                                   

From time to time, Danaher may issue additional authorized but unissued     
Danaher Common Shares for share dividends, stock splits, employee benefit       
programs, financing and acquisition transactions and other general corporate    
purposes. Such Danaher Common Shares will be available for issuance without     
action by Danaher Stockholders, unless such action is required by applicable    
law (see "Comparison of Stockholder Rights--Mergers, Acquisitions and Certain   
Other Transactions") or the rules of the NYSE or any other stock exchange on    
which Danaher Common Shares may be listed in the future.                        

Danaher Stockholders do not have preemptive rights and have no rights to    
convert their shares into any other security. All Danaher Common Shares are     
entitled to participate equally, and ratably in dividends on Danaher Common     
Shares as may be declared by the Danaher Board. In the event of the             
liquidation of Danaher, Danaher Stockholders are entitled to share ratably in   
assets remaining after payment of all liabilities, subject to prior             
distribution rights of any Preferred Shares then outstanding. Danaher           
Stockholders are entitled to one vote per share for the election of directors   
and upon all matters on which shareholders are entitled to vote.                

Certain directors and executive officers of Danaher beneficially own        
approximately 43.4% of the Danaher Common Shares. See "Available Information"   
for a description of how further information regarding such shareholdings may   
be obtained.                                                                    

APPRAISAL RIGHTS  

Holders of Fluke Common Stock are entitled to dissenters' rights under      
Chapter 23B.13 of the WBCA with respect to the Merger Agreement.                

THE FOLLOWING DISCUSSION IS NOT A COMPLETE STATEMENT OF THE LAW PERTAINING  
TO DISSENTERS' RIGHTS UNDER THE WBCA AND IS QUALIFIED IN ITS ENTIRETY BY THE    
FULL TEXT OF CHAPTER 23B.13 OF THE WBCA, WHICH IS REPRINTED IN ITS ENTIRETY AS  
ANNEX C TO THIS PROXY STATEMENT/PROSPECTUS.                                     

Fluke Stockholders will have the right to dissent with respect to the Merger
and, subject to certain conditions, will be entitled to receive a payment of    
the fair value of such Fluke Stockholders' shares under the WBCA. Each          
beneficial owner asserting dissenters' rights must assert such rights with      
respect to all shares of which such shareholder is the beneficial owner or      
over which such shareholder has power to direct the vote, and such shareholder  
must submit to Fluke, with or prior to such shareholder's assertion of          
dissenters' rights, the record shareholder's written consent to such dissent.   
A record shareholder may assert dissenters' rights as to                        

52  

DEF 14A
62nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 62nd
fewer than all the shares registered in such shareholder's name only if the     
shareholder dissents with respect to all shares beneficially owned by any one   
person and notifies Fluke in writing of the name and address of each person on  
whose behalf such shareholder asserts dissenters' rights. A Fluke dissenting    
holder (i) must deliver to Fluke before the vote on the Merger is taken,        
written notice of such shareholder's intent to demand payment for such          
shareholder's shares if the Merger is effectuated and (ii) must not vote such   
shareholder's shares in favor of the Merger. Such notice should be delivered    
to Fluke at its principal executive offices, 6920 Seaway Boulevard, Everett,    
Washington 98203, Attention: Secretary. A shareholder who does not satisfy      
both of these requirements will not be entitled to dissenters' rights.          

If the Merger is approved by the Fluke Stockholders, Fluke shall send       
written notice not later than ten days after the Effective Time to each Fluke   
dissenting holder (i) stating where such shareholder must send his or her       
written payment demand, (ii) stating where and when certificates representing   
Fluke Common Stock must be deposited, (iii) containing a form for demanding     
payment which requires that the dissenter certify whether or not he or she      
acquired beneficial ownership before the first public announcement of the       
Merger on April 27, 1998 and (iv) setting a date by which such written payment  
demand must be received. Such notice must be accompanied by a copy of Chapter   
23B.13 of the WBCA. A Fluke Stockholder who does not demand payment, certify    
that such shareholder acquired the shares before April 27, 1998, and deposit    
his or her shares within the time provided by such notice will not be entitled  
to dissenters' rights.                                                          

Fluke shall pay to each Fluke dissenting shareholder who complies with the  
procedures described above, within 30 days after the Effective Time, the        
amount that Fluke estimates to be the fair value of such dissenter's shares,    
plus accrued interest. Fluke will provide, along with such payment, certain     
financial information, including Fluke's balance sheet, income statement and    
statement of changes in shareholders' equity for its last fiscal year and       
Fluke's latest available interim financial statements, if any, an explanation   
of how Fluke estimated the fair value of the shares, an explanation of how the  
accrued interest was calculated and certain other information; provided,        
however, that Fluke may elect to withhold such payment from any dissenter who   
was not the beneficial owner of the shares of Fluke Common Stock as to which    
dissenters' rights are asserted before the date of first public announcement    
of the Merger, April 27, 1998. Any dissenting shareholder who is dissatisfied   
with such payment or such offer may, within 30 days of such payment or offer    
for payment, notify Fluke in writing of such shareholder's estimate of fair     
value of his or her shares and the amount of interest due, and demand payment   
thereof.                                                                        

If any Fluke dissenting shareholder's demand for payment is not settled     
within 60 days after receipt by Fluke of such shareholder's payment demand (as  
described above), the WBCA requires that Fluke commence a proceeding, and       
petition the court to determine the fair value of the shares and accrued        
interest, naming all Fluke dissenting shareholders whose demands remain         
unsettled as parties to the proceeding. The Court may appoint one or more       
persons as appraisers to receive evidence and recommend the fair value of the   
shares. The dissenters will be entitled to the same discovery rights as         
parties in other civil actions. Each dissenter made a party to the proceeding   
will be entitled to judgment for the amount, if any, by which the court finds   
the fair value of his or her shares, plus accrued interest, exceeds the amount  
paid by Fluke.                                                                  

Court costs and approval fees would be assessed against Fluke, except that  
the court may assess such costs against some or all of the dissenters to the    
extent that the court finds the dissenters acted arbitrarily, vexatiously or    
not in good faith in demanding payment. The court may also assess the fees and  
expenses of counsel and experts of the respective parties in amounts that the   
court finds equitable: (i) against Fluke, if the court finds that it did not    
substantially comply with certain provisions of the WBCA concerning             
dissenters' rights and (ii) against either the dissenter or Fluke, if the       
court finds that the party against whom the fees and expenses are assessed      
acted arbitrarily, vexatiously or not in good faith. If the court finds that    
services of counsel for any dissenter were of substantial benefit to other      
dissenters similarly situated, and that the fees should not be assessed         
against Fluke, the court may award to such counsel reasonable fees to be paid   
out of the amounts awarded to dissenters who benefited from the proceedings.    

53  

DEF 14A
63rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 63rd
It is a condition to Danaher's obligation to consummate the Merger that     
holders of no more than 5% of the outstanding Fluke Common Stock assert         
dissenters' appraisal rights.                                                   

LEGAL MATTERS 

The validity of the Danaher Common Shares to be issued in the Merger will be
passed upon for Danaher by Wilmer, Cutler & Pickering, counsel to Danaher.      

Wachtell, Lipton, Rosen & Katz and Davis Wright Tremaine have rendered the  
opinions referred to under the caption "Certain Federal Income Tax              
Consequences."                                                                  

EXPERTS 

The consolidated financial statements and schedule of Danaher and its       
consolidated subsidiaries as of December 31, 1995, 1996 and 1997, and for the   
years then ended, incorporated by reference in this Proxy Statement/Prospectus  
and elsewhere in the registration statement, of which this Proxy                
Statement/Prospectus is a part, have been audited by Arthur Andersen LLP,       
independent public accountants, as indicated in their reports with respect      
thereto, and are included herein in reliance upon the authority of said firm    
as experts in giving said reports.                                              

The consolidated financial statements of Fluke as of April 25, 1997 and     
April 26, 1996, and for each of the three years in the period ended April 25,   
1997, included in the 1997 Fluke Form 10-K which is incorporated by reference   
in this Proxy Statement/Prospectus, have been audited by Ernst & Young LLP,     
independent auditors, as set forth in their report thereon incorporated by      
reference therein. Such financial statements are incorporated herein by         
reference in reliance upon such report given upon the authority of such firm    
as experts in accounting and auditing.                                          

Representatives of Ernst & Young LLP are expected to be present at the Fluke
Special Meeting with the opportunity to make statements if they so desire.      
Such representatives are also expected to be available to respond to            
appropriate questions.                                                          

54  

DEF 14A
64th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 64th
                                                                         ANNEX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF APRIL 24, 1998

AMONG 

DANAHER CORPORATION,

FALCON ACQUISITION CORP.

AND 

FLUKE CORPORATION 

DEF 14A
65th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 65th
TABLE OF CONTENTS 

ARTICLE I 

The Merger

                                                                [Download Table]

                                                                        PAGE
                                                                        ----
                                                                            
Section 1.1. The Merger...............................................    1 
Section 1.2. Closing..................................................    1 
Section 1.3. Effective Time...........................................    2 
Section 1.4. Effects of the Merger....................................    2 
Section 1.5. Certificate of Incorporation and By-laws.................    2 
Section 1.6. Directors................................................    2 
Section 1.7. Officers.................................................    2 

                                  ARTICLE II                                

               Effect of the Merger on the Capital Stock of the             
              Constituent Corporations; Exchange of Certificates            

Section 2.1. Effect on Capital Stock..................................    2 
Section 2.2. Exchange of Certificates.................................    3 

                                 ARTICLE III                                

                        Representations and Warranties                      

Section 3.1. Representations and Warranties of the Company............    6 
Section 3.2. Representations and Warranties of Parent and Sub.........   15 

                                  ARTICLE IV                                

                  Covenants Relating to Conduct of Business                 

Section 4.1. Conduct of Business......................................   18 
Section 4.2. No Solicitation..........................................   20 

                                  ARTICLE V                                 

                            Additional Agreements                           

Section 5.1. Preparation of Form S-4 and the Proxy Statement;               
             Stockholders' Meeting....................................   21 
Section 5.2. Access to Information; Confidentiality...................   22 
Section 5.3. Reasonable Efforts; Notification.........................   22 
Section 5.4. Stock Option Plans.......................................   23 
Section 5.5. Benefit Plans and Employee Matters.......................   23 
Section 5.6. Indemnification, Exculpation and Insurance...............   23 
Section 5.7. Letters of Accountants...................................   24 

A-ii

DEF 14A
66th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 66th
                                                                [Download Table]

                                                                         PAGE
                                                                         ----
                                                                             
Section 5.8.  Fees and Expenses.......................................    24 
Section 5.9.  Public Announcements....................................    25 
Section 5.10. Affiliates; Accounting and Tax Treatment................    25 
Section 5.11. State Takeover Laws.....................................    26 
Section 5.12. Coordination of Dividends...............................    26 

                                  ARTICLE VI                                 

                             Conditions Precedent                            

Section 6.1.  Conditions to Each Party's Obligations to Effect the           
              Merger..................................................    26 
Section 6.2.  Additional Conditions to Obligations of Parent and Sub..    27 
Section 6.3.  Additional Conditions to Obligations of the Company.....    28 

                                 ARTICLE VII                                 

                      Termination, Amendment and Waiver                      

Section 7.1.  Termination.............................................    28 
Section 7.2.  Effect of Termination...................................    29 
Section 7.3.  Amendment...............................................    30 
Section 7.4.  Extension; Waiver.......................................    30 
              Procedure for Termination, Amendment, Extension or             
Section 7.5.  Waiver..................................................    30 

                                 ARTICLE VIII                                

                              General Provisions                             

Section 8.1.  Nonsurvival of Representations and Warranties...........    30 
Section 8.2.  Notices.................................................    30 
Section 8.3.  Definitions.............................................    31 
Section 8.4.  Interpretation..........................................    31 
Section 8.5.  Counterparts............................................    31 
Section 8.6.  Entire Agreement; No Third-Party Beneficiaries..........    32 
Section 8.7.  Governing Law...........................................    32 
Section 8.8.  Assignment..............................................    32 
Section 8.9.  Enforcement.............................................    32 
Exhibit 5.10  FORM OF AFFILIATE LETTER                                       

A-iii 

DEF 14A
67th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 67th
Agreement and Plan of Merger, dated as of April 24, 1998, among DANAHER     
CORPORATION, a Delaware corporation ("Parent"), FALCON ACQUISITION CORP., a     
Washington corporation ("Sub") and a direct wholly owned subsidiary of Parent,  
and FLUKE CORPORATION, a Washington corporation (the "Company").                

Whereas, the respective Boards of Directors of Parent, Sub and the Company  
have approved the merger of Sub with and into the Company (the "Merger"), upon  
the terms and subject to the conditions set forth in this Agreement and in      
accordance with the Washington Business Corporation Act (the "BCA"), whereby    
each issued and outstanding share of Company Common Stock (as defined in        
Section 3.1(c)) other than shares to be canceled in accordance with Section     
2.1(b), will be converted into the right to receive shares of common stock,     
par value $.01 per share, of Parent ("Parent Common Stock");                    

Whereas, in connection with the execution of this Agreement, Parent and the 
Company are entering on the date hereof into a stock option agreement, with     
the Company as issuer and Parent as Grantee (the "Stock Option Agreement");     

Whereas, the Merger requires the approval of the holders of two-thirds of   
the votes which the outstanding shares of the Company Common Stock are          
entitled to cast on such matter voting as a single class (the "Company          
Stockholder Approval");                                                         

Whereas, concurrently with the execution of this Agreement and as an        
inducement to Parent to enter into this Agreement, certain significant          
stockholders of the Company are entering into agreements with Parent            
(collectively, the "Stockholder Support Agreements") pursuant to which each     
such significant stockholder has, among other things, agreed to vote his        
shares of Company Common Stock in favor of the Merger;                          

Whereas, Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to  
prescribe various conditions to the Merger;                                     

Whereas, for Federal income tax purposes, it is intended that the Merger    
shall qualify as a reorganization within the meaning of Sections 368(a)(1)(A)   
and (a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code");    
and                                                                             

Whereas, for accounting purposes, it is intended that the Merger shall be   
accounted for as a "pooling-of-interests";                                      

Now, Therefore, in consideration of the representations, warranties,        
covenants and agreements contained in this Agreement, the parties agree as      
follows:                                                                        

ARTICLE I 

The Merger  

Section 1.1 The Merger. Upon the terms and subject to the conditions set    
forth in this Agreement, and in accordance with the BCA, Sub shall be merged    
with and into the Company at the Effective Time (as hereinafter defined).       
Following the Merger, the separate corporate existence of Sub shall cease and   
the Company shall continue as the surviving corporation (the "Surviving         
Corporation") and shall succeed to and assume all the rights and obligations    
of the Company and of Sub in accordance with the BCA.                           

Section 1.2. Closing. The closing of the Merger will take place at 10:00    
a.m. on a date to be specified by the parties, which shall be no later than     
the second business day after satisfaction or waiver of the conditions set      
forth in Article VI (the "Closing Date"), at the offices of Wachtell, Lipton,   
Rosen & Katz, New York, New York, unless another time, date or place is agreed  
to in writing by the parties hereto.                                            

A-1 

DEF 14A
68th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 68th
Section 1.3. Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date, the parties shall file        
articles of merger or other appropriate documents (in any such case, the        
"Articles of Merger") executed in accordance with the relevant provisions of    
the BCA and shall make all other filings or recordings required under the BCA.  
The Merger shall become effective at such time as the Articles of Merger are    
duly filed with the Washington Secretary of State, or at such other time as     
Sub and the Company shall agree should be specified in the Articles of Merger   
(the date and time of such filing, or such later date or time as may be set     
forth therein, being the "Effective Time").                                     

Section 1.4. Effects of the Merger. The Merger shall have the effects set   
forth in Section 11.060 of the BCA.                                             

Section 1.5. Certificate of Incorporation and By-laws. (a) The certificate  
of incorporation of Sub as in effect immediately prior to the Effective Time    
shall be the certificate of incorporation of the Surviving Corporation (except  
that such certificate of incorporation shall be amended at the Effective Time   
to provide that the name of the Surviving Corporation shall be "FLUKE           
CORPORATION"), until thereafter changed or amended as provided therein or by    
applicable law.                                                                 

(b) The by-laws of Sub as in effect at the Effective Time shall be the by-  
laws of the Surviving Corporation, until thereafter changed or amended as       
provided therein or by applicable law.                                          

Section 1.6. Directors. The directors of Sub at the Effective Time shall    
continue as the directors of the Surviving Corporation, until the earlier of    
their resignation or removal or until their respective successors are duly      
elected and qualified, as the case may be.                                      

Section 1.7. Officers. The officers of the Company immediately prior to the 
Effective Time shall become the officers of the Surviving Corporation, until    
the earlier of their resignation or removal or until their respective           
successors are duly elected and qualified, as the case may be.                  

ARTICLE II  

Effect of the Merger on the Capital Stock of the  
Constituent Corporations; Exchange of Certificates  

Section 2.1. Effect on Capital Stock. At the Effective Time, by virtue of   
the Merger and without any action on the part of Parent, Sub, the Company, or   
the holders of any shares of Company Common Stock or any shares of capital      
stock of Sub:                                                                   

(a) Capital Stock of Sub. Each share of the capital stock of Sub issued 
and outstanding immediately prior to the Effective Time shall be converted  
into and exchanged for one fully paid and nonassessable share of common     
stock of the Surviving Corporation.                                         

(b) Cancellation of Treasury Stock and Parent Owned Stock. Each share of
Company Common Stock that is owned by the Company or by any subsidiary of   
the Company and each share of Company Common Stock that is owned by Parent, 
Sub or any other subsidiary of Parent immediately prior to the Effective    
Time shall automatically be canceled and retired without any conversion     
thereof and no consideration shall be delivered with respect thereto.       

 (c) Conversion of Common Stock. Each share of Company Common Stock issued
and outstanding as of the Effective Time, other than Dissenting Shares (as  
hereinafter defined) and shares to be canceled in accordance with Section   
2.2(b), shall be converted, subject to Section 2.2 (e), into the right to   
receive 0.45239 (the "Exchange Ratio") of a share of Parent Common Stock.   
If, prior to the Effective Time, Parent should split or combine the Parent  
Common Stock, or pay a stock dividend or other stock distribution in Parent 
Common Stock, then the Exchange Ratio will be appropriately adjusted to     
reflect such split, combination, dividend or other distribution. (Without   
limiting the foregoing, in the event the previously                         

A-2 

DEF 14A
69th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 69th
announced two-for-one stock split proposed by Parent is approved by the     
shareholders of Parent and effected prior to the Effective Time, the        
Exchange Ratio shall be equal to 0.90478.)                                  

As of the Effective Time, all such shares of Company Common Stock shall no  
longer be outstanding and shall automatically be canceled and retired and       
shall cease to exist, and each certificate previously representing any such     
shares shall thereafter represent the right to receive a certificate            
representing the shares of Parent Common Stock into which such Company Common   
Stock was converted in the Merger. The holders of such certificates previously  
evidencing such shares of Company Common Stock outstanding immediately prior    
to the Effective Time shall cease to have any rights with respect to such       
shares of Company Common Stock as of the Effective Time except as otherwise     
provided herein or by law. Such certificates previously representing shares of  
Company Common Stock shall be exchanged for certificates representing whole     
shares of Parent Common Stock issued in consideration therefor upon the         
surrender of such certificates in accordance with the provisions of Section     
2.2, without interest. No fractional share of Parent Common Stock shall be      
issued, and, in lieu thereof, a cash payment shall be made pursuant to Section  
2.2(e).                                                                         

Section 2.2. Exchange of Certificates. (a) Exchange Agent. Prior to the     
Effective Time, Parent shall enter into an agreement with such bank or trust    
company as may be designated by Parent and as shall be reasonably satisfactory  
to the Company (the "Exchange Agent"), and as contemplated by such agreement,   
Parent shall deposit, or shall cause to be deposited, with the Exchange Agent   
as of the Effective Time (or otherwise when requested by the Exchange Agent     
from time to time in order to effect any exchange pursuant to this Section      
2.2), for the benefit of the holders of shares of Company Common Stock, for     
exchange in accordance with this Article II through the Exchange Agent,         
certificates representing the shares of Parent Common Stock issuable pursuant   
to Section 2.1 in exchange for outstanding shares of Company Common Stock       
(such certificates representing shares of Parent Common Stock, together with    
any dividends or distributions with respect thereto, being collectively         
referred to as the "Exchange Fund"). The Exchange Agent shall, pursuant to      
irrevocable instructions, deliver the Parent Common Stock contemplated to be    
issued pursuant to Section 2.1 out of the Exchange Fund. Except as              
contemplated by Section 2.2(e), the Exchange Fund shall not be used for any     
other purpose.                                                                  

(b) Exchange Procedure. As soon as reasonably practicable after the         
Effective Time, Parent shall instruct the Exchange Agent to mail to each        
holder of record of a certificate or certificates which immediately prior to    
the Effective Time represented outstanding shares of Company Common Stock (the  
"Certificates") (other than Dissenting Shares), (i) a letter of transmittal     
(which shall specify that delivery shall be effected, and risk of loss and      
title to the Certificates shall pass, only upon proper delivery of the          
Certificates to the Exchange Agent and which shall be in a customary form) and  
(ii) instructions for use in effecting the surrender of the Certificates in     
exchange for certificates representing shares of Parent Common Stock. Upon      
surrender of a Certificate for cancellation to the Exchange Agent, together     
with such letter of transmittal, duly executed, and such other documents as     
may reasonably be required by the Exchange Agent, the holder of such            
Certificate shall be entitled to receive in exchange therefor a certificate     
evidencing that number of whole shares of Parent Common Stock which such        
holder has the right to receive in respect of the shares of Company Common      
Stock formerly evidenced by such Certificate (after taking into account all     
shares of Company Common Stock then held of record by such holder), cash in     
lieu of fractional shares of Parent Common Stock to which such holder is        
entitled pursuant to Section 2.2(e) and any dividends or other distributions    
to which such holder is entitled pursuant to Section 2.2(c), and the            
Certificate so surrendered shall forthwith be canceled. In the event of a       
transfer of ownership of Company Common Stock which is not registered in the    
transfer records of the Company, a certificate representing the proper number   
of shares of Parent Common Stock may be issued to a person other than the       
person in whose name the Certificate so surrendered is registered, if such      
Certificate, accompanied by all documents required to evidence and effect such  
transfer, shall be properly endorsed or otherwise be in proper form for         
transfer and the person requesting such payment shall pay any transfer or       
other taxes required by reason of the issuance of shares of Parent Common       
Stock to a person other than the registered holder of such Certificate or       
establish to the satisfaction of Parent that such tax has been paid or is not   
applicable. Until surrendered as contemplated by this Section 2.2, each         
Certificate shall be deemed at any time after the Effective Time to             

A-3 

DEF 14A
70th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 70th
represent only the right to receive upon such surrender the Certificate         
evidencing whole shares of Parent Common Stock, cash in lieu of any fractional  
shares of Parent Common Stock to which such holder is entitled pursuant to      
Section 2.2(e) and any dividends or other distributions to which such holder    
is entitled pursuant to Section 2.2(c). No interest will be paid or will        
accrue on any cash payable pursuant to Section 2.2(c) or 2.2(e).                

(c) Distributions with Respect to Unexchanged Shares. No dividends or other 
distributions declared or made after the Effective Time with respect to Parent  
Common Stock with a record date after the Effective Time shall be paid to the   
holder of any unsurrendered Certificate with respect to the shares of Parent    
Common Stock represented thereby, and no cash payment in lieu of fractional     
shares shall be paid to any such holder pursuant to Section 2.2(e), in each     
case until the surrender of such Certificate in accordance with this Article    
II. Subject to the effect of applicable escheat laws, following surrender of    
such Certificate, there shall be paid to the holder of the Certificate          
representing whole shares of Parent Common Stock issued in exchange therefor,   
without interest, (i) at the time of such surrender, the amount of any cash     
payable in lieu of a fractional share of Parent Common Stock to which such      
holder is entitled pursuant to Section 2.2(e) and the amount of dividends or    
other distributions with a record date after the Effective Time theretofore     
paid with respect to such whole shares of Parent Common Stock, and (ii) at the  
appropriate payment date, the amount of dividends or other distributions with   
a record date after the Effective Time but prior to such surrender and with a   
payment date subsequent to such surrender payable with respect to such whole    
shares of Parent Common Stock.                                                  

(d) No Further Ownership Rights in Company Stock. All shares of Parent      
Common Stock issued upon the surrender for exchange of Certificates in          
accordance with the terms of this Article II (including any cash paid pursuant  
to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued (and paid) in  
full satisfaction of all rights pertaining to the shares of Company Common      
Stock theretofore represented by such Certificates, subject, however, to the    
Surviving Corporation's obligation to pay any dividends or make any other       
distributions with a record date prior to the Effective Time which may have     
been declared or made by the Company on such shares of Company Common Stock in  
accordance with the terms of this Agreement or prior to the date of this        
Agreement and which remain unpaid at the Effective Time and have not been paid  
prior to surrender. At the Effective Time, the stock transfer books of the      
Company shall be closed, and there shall be no further registrations of         
transfers of shares of Company Common Stock thereafter on the records of the    
Company. If, after the Effective Time, Certificates are presented to the        
Surviving Corporation, Parent or the Exchange Agent for any reason, they shall  
be cancelled and exchanged as provided in this Article II.                      

(e) No Fractional Shares. (i) No certificates or scrip representing         
fractional shares of Parent Common Stock shall be issued upon the surrender     
for exchange of Certificates, and such fractional share interests will not      
entitle the owner thereof to vote or to any rights of a stockholder of Parent.  

(ii) As promptly as practicable following the Effective Time, Parent    
shall instruct the Exchange Agent to determine the excess of (x) the number 
of full shares of Parent Common Stock delivered to the Exchange Agent by    
Parent pursuant to Section 2.2(a) over (y) the aggregate number of full     
shares of Parent Common Stock to be distributed to holders of Certificates  
pursuant to Section 2.2(b) (such excess being herein called the "Excess     
Shares"). As soon after the Effective Time as practicable, the Exchange     
Agent, as agent for such holders of Certificates, shall sell the Excess     
Shares at the then prevailing prices on The New York State Exchange         
("NYSE"), all in the manner provided in paragraph (iii) of this Section     
2.2(e).                                                                     

(iii) The sale of the Excess Shares by the Exchange Agent shall be      
executed on the NYSE and shall be executed in round lots to the extent      
practicable. Until the net proceeds of such sale or sales have been         
distributed to such holders of Certificates, the Exchange Agent will hold   
such proceeds in trust for such holders of Certificates (the "Trust").      
Parent shall pay all commissions, transfer taxes and other out-of-pocket    
transaction costs of the Exchange Agent incurred in connection with such    
sale or sales of Excess Shares. In addition, Parent shall pay the Exchange  
Agent's compensation and expenses in connection with such sales. The        
Exchange Agent shall determine the portion of the Trust to which each       
holder of one or more Certificates shall be entitled, if any, by            
multiplying the amount of the aggregate net proceeds comprising the Trust   
by a fraction the numerator of which is the amount of the fractional share  
interest to which such holder of Certificates is entitled (after taking     
into account all shares of Company Common Stock                             

A-4 

DEF 14A
71st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 71st
held of record immediately prior to the Effective Time by such holder) and  
the denominator of which is the aggregate amount of fractional share        
interests to which all holders of Certificates are entitled.                

(iv) As soon as practicable after the determination of the amount of    
cash, if any, to be paid to holders of Certificates with respect to any     
fractional share interests, the Exchange Agent shall promptly pay such      
amounts to such holders of Certificates subject to and in accordance with   
the terms of Section 2.2(c).                                                

(f) Termination of Exchange Fund and Trust. Any portion of the Exchange Fund
and Trust that remains undistributed to the holders of Certificates for six     
months after the Effective Time shall be delivered to Parent, upon demand, and  
any holders of Certificates who have not theretofore complied with this         
Article II shall thereafter look only to Parent for the shares of Parent        
Common Stock, any cash in lieu of fractional shares of Parent Common Stock and  
any dividends or distributions with respect to Parent Common Stock to which     
they are entitled.                                                              

(g) No Liability. None of Parent, Sub, the Company or the Exchange Agent    
shall be liable to any holder of shares of Company Common Stock for any shares  
of Parent Common Stock (or dividends or distributions with respect thereto) or  
cash from the Exchange Fund or the Trust delivered to a public official         
pursuant to any applicable abandoned property, escheat or similar law.          

(h) Withholding Rights. Parent or the Exchange Agent shall be entitled to   
deduct and withhold from the consideration otherwise payable pursuant to this   
Agreement to any holder of Certificates such amounts as Parent or the Exchange  
Agent, as the case may be, is required to deduct and withhold with respect to   
the making of such payment under the Code, or any provision of state, local or  
foreign tax law. To the extent that amounts are so withheld by Parent or the    
Exchange Agent, such withheld amounts shall be treated for all purposes of      
this Agreement as having been paid to the holder of the Certificates in         
respect of which such deduction and withholding shall have been made by Parent  
or the Exchange Agent.                                                          

(i) Investment of Exchange Fund and Trust. The Exchange Agent shall invest  
any cash included in the Exchange Fund and the Trust, as directed by Parent,    
on a daily basis. Any interest and other income resulting from such             
investments shall be paid to Parent.                                            

(j) Dissenting Stockholders. Notwithstanding anything in this Agreement to  
the contrary, shares of Company Common Stock which are issued and outstanding   
immediately prior to the Effective Time and which are held by stockholders who  
did not vote in favor of the adoption of this Agreement, who are entitled to    
demand the fair value of such shares of Company Common Stock under Sections     
13.020 through 13.260 of the BCA, and who comply with all of the relevant       
provisions of such Sections (the "Dissenting Shares") shall not be converted    
into or be exchangeable for the right to receive Parent Common Stock (unless    
and until such holders shall have failed to perfect or shall have effectively   
withdrawn or lost their dissenters' rights under the BCA), but shall instead    
be entitled to all applicable dissenters' rights as are prescribed by the BCA.  
If any such holder shall have failed to perfect or shall have effectively       
withdrawn or lost such dissenters' rights, such holder's shares of Company      
Common Stock shall thereupon be converted into and become exchangeable for the  
right to receive, as of the Effective Time, Parent Common Stock, without any    
interest thereon. The Company shall give Parent (i) prompt notice of any        
written demands for payment for any Company Common Stock under Section 13.210   
of the BCA, attempted withdrawals of such demands, and any other instruments    
served pursuant to the BCA and received by the Company relating to dissenters'  
rights, and (ii) the opportunity to participate in and direct all negotiations  
and proceedings with respect to the exercise of dissenters' rights under the    
BCA. The Company shall not, except with the prior written consent of the        
Parent, voluntarily make any payment with respect to any demands for payment    
for Company Common Stock under the BCA, offer to settle or settle any such      
demands or approve any withdrawal of any such demands.                          

A-5 

DEF 14A
72nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 72nd
ARTICLE III 

Representations and Warranties  

Section 3.1. Representations and Warranties of the Company. Except as       
disclosed by specific reference to the Disclosure Schedule delivered by the     
Company to Parent prior to the execution of this Agreement (the "Company        
Disclosure Schedule"), the Company represents and warrants to Parent and Sub    
as follows:                                                                     

(a) Organization, Standing and Corporate Power. The Company and each of 
its subsidiaries is a corporation duly organized, validly existing and in   
good standing under the laws of the jurisdiction in which it is organized   
and has the requisite corporate power and authority to carry on its         
business as now being conducted. The Company and each of its subsidiaries   
is duly qualified or licensed to do business and is in good standing in     
each jurisdiction in which the nature of its business or the ownership or   
leasing of its properties makes such qualification or licensing necessary,  
other than in such jurisdictions where the failure to be so qualified or    
licensed (individually or in the aggregate) would not have a material       
adverse effect on the Company. The Company has made available to Parent     
complete and correct copies of its certificate of incorporation and by-laws 
and the certificates of incorporation and by-laws or other organizational   
documents of its Material Subsidiaries, in each case as amended to the date 
of this Agreement. For purposes of this Agreement, "Material Subsidiary"    
means each subsidiary of the Company designated as a Material Subsidiary in 
Schedule 3.1(b)(i) of the Company Disclosure Schedule.                      

(b) Subsidiaries. Schedule 3.1(b)(i) of the Company Disclosure Schedule 
lists each subsidiary of the Company and its jurisdiction of incorporation  
or organization. All the outstanding shares of capital stock of each such   
subsidiary have been validly issued and are fully paid and nonassessable    
and are owned by the Company, by another subsidiary of the Company or by    
the Company and another such subsidiary, free and clear of all pledges,     
claims, liens, charges, encumbrances and security interests of any kind or  
nature whatsoever (collectively, "Liens"). Except for the capital stock of  
its subsidiaries, the Company does not own, directly or indirectly, any     
capital stock or other ownership interest in any corporation, partnership,  
joint venture or other entity.                                              

(c) Capital Structure. The authorized capital stock of the Company      
consists of 40,000,000 shares of Common Stock, $.25 par value (the "Company 
Common Stock") and 2,000,000 shares of preferred stock, $.25 par value. At  
the close of business on April 22, 1998, (i) 18,275,747 shares of Company   
Common Stock and no shares of preferred stock were issued and outstanding,  
(ii) there were no shares of Company Common Stock held by the Company in    
its treasury and (iii) 2,907,019 shares of Company Common Stock were        
reserved for issuance upon exercise of outstanding Stock Options (as        
defined in Section 5.4). Each share of Company Common Stock carries with it 
a common share purchase right (a "Right") issued pursuant to the Rights     
Agreement, dated as of July 11, 1988, and amended and restated on April 25, 
1997, between the Company and Continental Stock Transfer and Trust Company, 
as Rights Agent (the "Rights Agreement"), which entitles the holder thereof 
to purchase, on the occurrence of certain events, Company Common Stock.     
Except as set forth above, at the close of business on April 22, 1998, no   
shares of capital stock or other voting securities of the Company were      
issued, reserved for issuance or outstanding. Since April 22, 1998, (x) no  
shares of Common Stock have been issued except pursuant to Stock Options    
outstanding on April 22, 1998, and (y) no new Stock Options have been       
issued. There are no outstanding stock appreciation rights of the Company   
which were not granted in tandem with a related Stock Option and no         
outstanding limited stock appreciation rights or other rights to redeem for 
cash options or warrants of the Company. All outstanding shares of capital  
stock of the Company are, and all shares which may be issued upon the       
exercise of Stock Options will be, when issued, duly authorized, validly    
issued, fully paid and nonassessable and not subject to preemptive rights.  
There are no bonds, debentures, notes or other indebtedness of the Company  
having the right to vote (or convertible into, or exchangeable for,         
securities having the right to vote) on any matters on which stockholders   
of the Company may vote. Except for the Stock Options described above, as   
of the date of this Agreement, there are no outstanding securities,         
options, warrants, calls, rights, commitments, agreements, arrangements or  
undertakings of any kind to which the Company or any of its subsidiaries is 
a party or by which any of them is bound obligating the Company or          

A-6 

DEF 14A
73rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 73rd
any of its subsidiaries to issue, deliver or sell, or cause to be issued,   
delivered or sold, additional shares of capital stock or other voting       
securities of the Company or of any of its subsidiaries or obligating the   
Company or any of its subsidiaries to issue, grant, extend or enter into    
any such security, option, warrant, call, right, commitment, agreement,     
arrangement or undertaking. There are no outstanding contractual            
obligations of the Company or any of its subsidiaries to repurchase, redeem 
or otherwise acquire any shares of capital stock (or options to acquire any 
such shares) of the Company or any of its subsidiaries. There are no        
agreements, arrangements or commitments of any character (contingent or     
otherwise) pursuant to which any person is or may be entitled to receive    
any payment based on the revenues, earnings or financial performance of the 
Company or any of its subsidiaries or assets or calculated in accordance    
therewith (other than ordinary course commissions to sales representatives  
of the Company based upon revenues generated by them without augmentation   
as a result of the transactions contemplated hereby) or to cause the        
Company or any of its subsidiaries to file a registration statement under   
the Securities Act of 1933 or which otherwise relate to the registration of 
any securities of the Company.                                              

(d) Authority; Noncontravention. The Company has the requisite corporate
power and authority to enter into this Agreement and the Stock Option       
Agreement and, subject to the Company Stockholder Approval, to consummate   
the transactions contemplated hereby and thereby. The execution and         
delivery of this Agreement and the Stock Option Agreement by the Company    
and the consummation by the Company of the transactions contemplated hereby 
and thereby have been duly authorized by all necessary corporate action on  
the part of the Company, subject to the Company Stockholder Approval of     
this Agreement. The Company Stockholder Approval is the only vote of the    
holders of any class or series of the Company's securities necessary to     
approve this Agreement and the transactions contemplated hereby. This       
Agreement and the Stock Option Agreement have been duly executed and        
delivered by the Company and constitute valid and binding obligations of    
the Company, enforceable against the Company in accordance with their       
terms. The execution and delivery of this Agreement and the Stock Option    
Agreement do not, and the consummation of the transactions contemplated     
hereby and thereby and compliance with the provisions hereof and thereof    
will not, conflict with, or result in any violation of or default (with or  
without notice or lapse of time, or both) under, or require the consent of  
(or the giving of notice to) a third party with respect to, or give rise to 
a right of termination, cancellation or acceleration of any obligation or   
to loss of a material benefit under, or result in the creation of any Lien  
upon any of the properties or assets of the Company or any of its           
subsidiaries under, (i) the certificate of incorporation or by-laws of the  
Company or the comparable charter or organizational documents of any of its 
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,      
indenture, lease or other agreement, instrument, permit, concession,        
franchise or license applicable to the Company or any of its subsidiaries   
or their respective properties or assets, or (iii) subject to the           
governmental filings and other matters referred to in the following         
sentence, any judgment, order, decree, statute, laws, ordinance, rule or    
regulation applicable to the Company or any of its subsidiaries or their    
respective properties or assets, other than, in the case of clauses (ii) or 
(iii), any such conflicts, violations, defaults, rights or Liens that       
individually or in the aggregate would not (x) have a material adverse      
effect on the Company, (y) impair in any material respect the ability of    
the Company to perform its obligations under this Agreement or the Stock    
Option Agreement, or (z) prevent or materially delay the consummation of    
any of the transactions contemplated hereby or thereby. No consent,         
approval, order or authorization of, or registration, declaration or filing 
with, any Federal, state or local government or any court, administrative   
or regulatory agency or commission or other governmental authority or       
agency, domestic or foreign (a "Governmental Entity"), is required by the   
Company or any of its subsidiaries in connection with the execution and     
delivery of this Agreement or the Stock Option Agreement by the Company or  
the consummation by the Company of the transactions contemplated hereby or  
thereby, except for (i) the filing with the Federal Trade Commission and    
the Antitrust Division of the Department of Justice (the "Specified         
Agencies") of a premerger notification and report form by the Company under 
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"),   
(ii) the filing with the Securities and Exchange Commission (the "SEC") of  
(x) the Proxy Statement (as defined in Section 5.1) and (y) such reports    
under Section 13(a) of the Securities Exchange Act of 1934, as amended (the 
"Exchange Act"), as may be required in connection with this Agreement and   
the Stock Option Agreement and the transactions                             

A-7 

DEF 14A
74th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 74th
contemplated hereby and thereby, (iii) the filing of the Articles of Merger 
with the Washington Secretary of State and appropriate documents with the   
relevant authorities of other states in which the Company is qualified to   
do business, and (iv) such other consents, approvals, orders,               
authorizations, registrations, declarations and filings, including under    
the laws of any foreign country in which the Company or any of its          
subsidiaries conducts any business or owns any property or assets, the      
failure of which to be obtained or made would not, individually or in the   
aggregate, have a material adverse effect on the Company or prevent or      
materially delay the consummation of any of the transactions contemplated   
by this Agreement or the Stock Option Agreement.                            

(e) SEC Documents; Financial Statements. Since January 1, 1995, the     
Company has filed with the SEC all required reports and forms and other     
documents (the "SEC Documents"). As of their respective dates, the SEC      
Documents complied in all material respects with the requirements of the    
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange  
Act, as the case may be, and the rules and regulations of the SEC           
promulgated thereunder applicable to such SEC Documents, and none of the    
SEC Documents contained any untrue statement of a material fact or omitted  
to state a material fact required to be stated therein or necessary in      
order to make the statements therein, in light of the circumstances under   
which they were made, not misleading. Except to the extent that information 
contained in any SEC Document has been revised or superseded by a later-    
filed SEC Document filed and publicly available prior to the date of this   
Agreement, none of the SEC Documents contains any untrue statement of a     
material fact or omits to state any material fact required to be stated     
therein or necessary in order to make the statements therein, in light of   
the circumstances under which they were made, not misleading. The financial 
statements of the Company included in the SEC Documents comply as to form   
in all material respects with applicable accounting requirements and the    
published rules and regulations of the SEC with respect thereto, have been  
prepared in accordance with generally accepted accounting principles        
(except, in the case of unaudited statements, as permitted by Form 10-Q of  
the SEC) applied on a consistent basis during the periods involved (except  
as may be indicated in the notes thereto) and fairly present the            
consolidated financial position of the Company and its consolidated         
subsidiaries as of the dates thereof and the consolidated results of their  
operations and cash flows for the periods then ended (subject, in the case  
of unaudited statements, to normal year-end audit adjustments). Except as   
set forth in the SEC Documents filed prior to the date of this Agreement    
(or, with respect to any future repetition of this representation, prior to 
the time of such repetition), and except for liabilities and obligations    
incurred in the ordinary course of business consistent with past practice   
since the date of the most recent consolidated balance sheet included in    
the SEC Documents, neither the Company nor any of its subsidiaries has any  
liabilities or obligations of any nature (whether accrued, absolute,        
contingent or otherwise) required by generally accepted accounting          
principles to be set forth on a consolidated balance sheet of the Company   
and its consolidated subsidiaries or in the notes thereto.                  

(f) Information Supplied. None of the information supplied or to be     
supplied by the Company specifically for inclusion or incorporation by      
reference in (i) the Form S-4 (as defined in Section 5.1(a)) will, at the   
time the Form S-4 is filed with the SEC, at any time it is amended or       
supplemented or at the time it becomes effective under the Securities Act,  
contain any untrue statement of a material fact or omit to state any        
material fact required to be stated therein or necessary to make the        
statements therein not misleading or (ii) the Proxy Statement will, at the  
date it is first mailed to the Company's stockholders or at the time of the 
Company Stockholders' Meeting (as defined in Section 5.1(b)), contain any   
untrue statement of a material fact or omit to state any material fact      
required to be stated therein or necessary in order to make the statements  
therein, in light of the circumstances under which they are made, not       
misleading (provided that the Company shall not be liable in damages for    
breach of this representation except to the extent the information which is 
the subject of such liability was provided in writing). The Proxy Statement 
will comply as to form in all material respects with the requirements of    
the Exchange Act and the rules and regulations thereunder, except that no   
representation or warranty is made by the Company with respect to           
statements made or incorporated by reference therein based on information   
supplied by Parent or Sub specifically for inclusion or incorporation by    
reference in the Proxy Statement.                                           

A-8 

DEF 14A
75th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 75th
(g) Absence of Certain Changes or Events. Except as disclosed in the SEC
Documents filed prior to the date of this Agreement, since April 26, 1997   
the Company has conducted its business only in the ordinary course          
consistent with prior practice, and there has not been (i) any material     
adverse change in the Company and its subsidiaries on a consolidated basis, 
(ii) any declaration, setting aside or payment of any dividend or other     
distribution (whether in cash, stock or property) with respect to any of    
the Company's capital stock, (iii) any split, combination or                
reclassification of any of its capital stock or any issuance or the         
authorization of any issuance of any other securities in respect of, in     
lieu of or in substitution for shares of its capital stock, (iv) (x) any    
granting by the Company or any of its subsidiaries to any officer or        
general manager of the Company or any of its subsidiaries of any increase   
in compensation, except in the ordinary course of business consistent with  
prior practice or as was required under employment agreements in effect as  
of the date of the most recent audited financial statements included in the 
SEC Documents filed prior to the date of this Agreement (a list of all such 
employment agreements being set forth in Section 3.1(g) of the Company      
Disclosure Schedule), (y) any granting by the Company or any of its         
subsidiaries to any such officer or general manager of any increase in      
severance or termination pay, except as was required under employment,      
severance or termination agreements in effect as of the date of the most    
recent audited financial statements included in the SEC Documents filed     
prior to the date of this Agreement, or (z) any entry into, or renewal or   
modification of, any employment, consulting, severance or termination       
agreement with any such officer or general manager by the Company or any of 
its subsidiaries, (v) any damage, destruction or loss, whether or not       
covered by insurance, that has or would reasonably be expected to have a    
material adverse effect on the Company, (vi) any change in accounting       
methods, principles or practices by the Company, except insofar as may have 
been required by a change in generally accepted accounting principles or    
(vii) any agreement to do any of the things described in the preceding      
clauses (i) through (vi).                                                   

(h) Litigation. Except as disclosed in the SEC Documents filed prior to 
the date of this Agreement, there is no suit, action, investigation, audit  
or proceeding pending or, to the knowledge of the Company, threatened       
against the Company or any of its subsidiaries that, individually or in the 
aggregate, would reasonably be expected to (i) have a material adverse      
effect on the Company, (ii) impair in any material respect the ability of   
the Company to perform its obligations under this Agreement, or (iii)       
prevent the consummation of any of the transactions contemplated by this    
Agreement, nor is there any judgment, decree, injunction, rule or order of  
any Governmental Entity or arbitrator outstanding against the Company or    
any of its subsidiaries having, or which is reasonably likely to have, any  
effect referred to in the foregoing clauses (i) through (iii).              

(i) Benefit Plans; ERISA Compliance. (i) For purposes of this Section   
3.1(i), the following terms have the meanings set forth below:              

"Controlled Group Liability" means any and all liabilities (i) under
Title IV of ERISA, (ii) under section 302 of ERISA, (iii) under         
sections 412 and 4971 of the Code, (iv) as a result of a failure to     
comply with the continuation coverage requirements of section 601 et    
seq. of ERISA and section 4980B of the Code, and (v) under              
corresponding or similar provisions of foreign laws or regulations,     
other than such liabilities that arise solely out of, or relate solely  
to, the Employee Benefit Plans.                                         

"ERISA Affiliate" means, with respect to any entity, trade or       
business, any other entity, trade or business that is a member of a     
group described in Section 414(b), (c), (m) or (o) of the Code or       
Section 4001(b)(1) of ERISA that includes the first entity, trade or    
business, or that is a member of the same "controlled group" as the     
first entity, trade or business pursuant to Section 4001(a)(14) of      
ERISA.                                                                  

An "Employee Benefit Plan" means any employee benefit plan, program,
policy, practices, or other arrangement providing benefits to any       
current or former employee, officer or director of the Company or any   
of its subsidiaries or any beneficiary or dependent thereof that is     
sponsored or maintained by the Company or any of its subsidiaries or to 
which the Company or any of its subsidiaries contributes or is          
obligated to contribute, whether or not written, including without      
limitation any employee welfare benefit plan within the meaning of      
Section 3(1) of ERISA, any employee pension benefit plan within the     
meaning of Section 3(2) of ERISA (whether or not such plan              

A-9 

DEF 14A
76th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 76th
is subject to ERISA) and any bonus, incentive, deferred compensation,   
vacation, stock purchase, stock option, severance, employment, change   
of control or fringe benefit plan, program or agreement.                

A "Plan" means any Employee Benefit Plan other than a Multiemployer 
Plan.                                                                   

A "Multiemployer Plan" means any "multiemployer plan" within the    
meaning of Section 4001(a)(3) of ERISA.                                 

"Withdrawal Liability" means liability to a Multiemployer Plan as a 
result of a complete or partial withdrawal from such Multiemployer      
Plan, as those terms are defined in Part I of Subtitle E of Title IV of 
ERISA.                                                                  

(ii) Schedule 3.1(i)(ii) of the Company Disclosure Schedule sets forth a
true, complete and correct complete list of all material Employee Benefit   
Plans (the "Plan List").                                                    

(iii) With respect to each Plan, the Company has delivered to Parent a  
true, correct and complete copy of: (A) each writing constituting a part of 
such Plan, including without limitation all plan documents, employee        
communications, benefit schedules, trust agreements, and insurance          
contracts and other funding vehicles; (B) the most recent Annual Report     
(Form 5500 Series) and accompanying schedule, if any; (C) the current       
summary plan description and any material modifications thereto, if any (in 
each case, whether or not required to be furnished under ERISA); (D) the    
most recent annual financial report, if any; (E) the most recent actuarial  
report, if any; and (F) the most recent determination letter from the IRS,  
if any. Except as specifically provided in the foregoing documents          
delivered to Parent, there are no amendments to any Plan that have been     
adopted or approved nor has the Company or any of its subsidiaries          
undertaken to make any such amendments or to adopt or approve any new Plan. 

(iv) The Plan List identifies each Plan that is intended to be a        
"qualified plan" within the meaning of Section 401(a) of the Code           
("Qualified Plans"). The Internal Revenue Service has issued a favorable    
determination letter with respect to each Qualified Plan and the related    
trust that has not been revoked, and there are no existing circumstances    
nor any events that have occurred that could adversely affect the qualified 
status of any Qualified Plan or the related trust unless such circumstances 
or events could be cured without any material liability to the Company and  
its subsidiaries. The Plan List identifies each Plan which is intended to   
meet the requirements of Code Section 501(c)(9), and each such plan meets   
such requirements in all material respects and provides no disqualified     
benefits (as such term is defined in Code Section 4976(b).                  

(v) All contributions required to be made to any Plan by applicable law 
or regulation or by any plan document or other contractual undertaking, and 
all premiums due or payable with respect to insurance policies funding any  
Plan, for any period through the date hereof have been timely made or paid  
in full or, to the extent not required to be made or paid on or before the  
date hereof, have been fully reflected on the Company's most recent balance 
sheet included in the SEC Documents filed prior to the date hereof. Each    
Employee Benefit Plan that is an employee welfare benefit plan under        
Section 3(1) of ERISA is either (A) funded through an insurance company     
contract and is not a "welfare benefit fund" with the meaning of Section    
419 of the Code or (B) unfunded.                                            

(vi) With respect to each Employee Benefit Plan, the Company and its    
subsidiaries have complied, and are now in compliance, in all material      
respects with all provisions of ERISA, the Code and all laws and            
regulations applicable to such Employee Benefit Plans and each Employee     
Benefit Plan has been administered in all material respects in accordance   
with its terms. There is not now, nor do any circumstances exist that could 
give rise to, any requirement for the posting of security with respect to a 
Plan or the imposition of any material lien on the assets of the Company or 
any of its subsidiaries under ERISA or the Code.                            

(vii) With respect to each Plan that is subject to Title IV or Section  
302 of ERISA or Section 412 or 4971 of the Code: (A) there does not exist   
any accumulated funding deficiency within the meaning of Section 412 of the 
Code or Section 302 of ERISA, whether or not waived; (B) the fair market    
value of the assets of such Plan equals or exceeds the actuarial present    
value of all accrued benefits under such Plan (whether or not vested),      
based upon the actuarial assumptions used to prepare the most recent        
actuarial                                                                   

A-10  

DEF 14A
77th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 77th
report for such Plan; (C) no reportable event within the meaning of Section 
4043(c) of ERISA for which the 30-day notice requirement has not been       
waived has occurred, and the consummation of the transactions contemplated  
by this agreement will not result in the occurrence of any such reportable  
event; (D) all premiums to the Pension Benefit Guaranty Corporation have    
been timely paid in full; (E) no material liability (other than for         
premiums to the PBGC) under Title IV of ERISA has been or is expected to be 
incurred by the Company; and (F) the PBGC has not instituted proceedings to 
terminate any such Plan and, to the Company's knowledge, no condition       
exists that presents a material risk that such proceedings will be          
instituted or which would constitute grounds under Section 4042 of ERISA    
for the termination of, or the appointment of a trustee to administer, any  
such Plan.                                                                  

(viii) No Employee Benefit Plan is a Multiemployer Plan or a plan that  
has two or more contributing sponsors at least two of whom are not under    
common control, within the meaning of Section 4063 of ERISA (a "Multiple    
Employer Plan"). None of the Company and its subsidiaries nor any of their  
respective ERISA Affiliates has, at any time during the last six years,     
contributed to or been obligated to contribute to any Multiemployer Plan or 
Multiple Employer Plan. None of the Company and its subsidiaries nor any    
ERISA Affiliates has incurred any Withdrawal Liability that has not been    
satisfied in full.                                                          

(ix) There does not now exist, nor do any circumstances exist that could
result in, any Controlled Group Liability that would be a liability of the  
Company following the Closing. Without limiting the generality of the       
foregoing, neither the Company nor any ERISA Affiliate of the Company has   
engaged in any transaction described in Section 4069 or Section 4204 or     
4212 of ERISA.                                                              

(x) Except as disclosed in the SEC Reports, the Company has no material 
liability for life, health, medical or other welfare benefits to former     
employees or beneficiaries or dependents thereof, except for health         
continuation coverage as required by Section 4980B of the Code or Part 6 of 
Title I of ERISA and at no expense to the Company.                          

 (xi) Except as set forth on Schedule 3.1(i)(xi) of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor the      
consummation of the transactions contemplated hereby will (either alone or  
in conjunction with any other event) result in, cause the accelerated       
vesting or delivery of, or increase the amount or value of, any payment or  
benefit to any employee, officer or director of the Company or any of its   
subsidiaries.                                                               

(xii) None of the Company and its subsidiaries nor any other person,    
including any fiduciary, has engaged in any "prohibited transaction" (as    
defined in Section 4975 of the Code or Section 406 of ERISA), which could   
subject any of the Employee Benefit Plans or their related trusts, the      
Company, any of its subsidiaries or any person that the Company or any of   
its subsidiaries has an obligation to indemnify, to any tax or penalty      
imposed under Section 4975 of the Code or Section 502 of ERISA.             

(xiii) There are no pending or threatened claims (other than claims for 
benefits in the ordinary course), lawsuits or arbitrations which have been  
asserted or instituted, or to Company's knowledge, no set of circumstances  
exists which may reasonably give rise to a claim or lawsuit, against the    
Plans, any fiduciaries thereof with respect to their duties to the Plans or 
the assets of any of the trusts under any of the Plans which could          
reasonably be expected to result in any material liability of the Company   
or any of its subsidiaries to the Pension Benefit Guaranty Corporation, the 
Department of Treasury, the Department of Labor, any Multiemployer Plan,    
any Plan or any participant in a Plan.                                      

(xiv) For purposes of this Section 3.1(i), the term "employee" shall be 
considered to include individuals rendering personal services to the        
Company as independent contractors.                                         

(j) Taxes. (i) Each of the Company and its subsidiaries has timely filed
all Federal, state, local and foreign tax returns and reports required to   
be filed by it through the date hereof and shall timely file all such       
returns and reports required to be filed on or before the Effective Time.   
All such returns and reports are and will be true, complete and correct in  
all material respects. The Company and each of its subsidiaries has paid    
and discharged (or the Company has paid and discharged on its behalf) all   
taxes due from them, other than such taxes as are being contested in good   
faith by appropriate proceedings and are adequately reserved for on the     
most recent financial statements contained in the SEC Documents filed prior 
to the date of the                                                          

A-11  

DEF 14A
78th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 78th
Agreement. The most recent financial statements contained in the SEC        
Documents filed prior to the date of this Agreement properly reflect in     
accordance with generally accepted accounting principles all taxes payable  
by the Company and its subsidiaries for all taxable periods and portions    
thereof through the date of such financial statements.                      

(ii) No claim or deficiency for any taxes has been proposed, threatened,
asserted or assessed by the IRS or any other taxing authority or agency     
against the Company, or any of its subsidiaries which, if resolved against  
the Company or any of its subsidiaries, would, individually or in the       
aggregate, have a material adverse effect upon the Company, and no requests 
for waivers of the time to assess any taxes are pending. The Federal income 
tax returns of the Company and each of its subsidiaries consolidated in     
such returns have been examined by and settled with the Internal Revenue    
Service for all years through fiscal year 1993. The fiscal year 1994 was    
closed after review and approval of the amended federal tax return. The     
Company has made available to Parent true and correct copies of all         
federal, state, local and foreign income tax returns, and state and local   
property and sales tax returns and any other tax returns filed by the       
Company or any of its subsidiaries for any of the taxable periods that      
remains open, as of the date hereof, for examination or assessment of tax.  

 (iii) Neither the Company nor any of its subsidiaries has taken or agreed
to take any action or has any knowledge of any fact or circumstance that    
might prevent or impede the Merger from qualifying as a reorganization      
within the meaning of Sections 368(a)(1)(A) and (a)(2)(E) of the Code.      

 (iv) As used in this Agreement, "taxes" shall include all Federal, state,
local and foreign income, property, sales, excise and other taxes, of any   
nature whatsoever (whether payable directly or by withholding), together    
with any interest and penalties, additions to tax or additional amounts     
imposed with respect thereto. Notwithstanding the definition of             
"subsidiary" set forth in Section 8.3 of this Agreement, for the purposes   
of this Section 3.1(k), references to the Company and each of its           
subsidiaries shall also include former subsidiaries of the Company for the  
periods during which any such corporations were included in the             
consolidated federal income tax return of the Company.                      

(k) No Excess Parachute Payments. Any amount that could be received     
(whether in cash or property or the vesting of property) as a result of any 
of the transactions contemplated by this Agreement by any employee, officer 
or director of the Company or any of its affiliates who is a "disqualified  
individual" (as such term is defined in proposed Treasury Regulation        
Section 1.280G-1) under any employment, severance or termination agreement, 
other compensation arrangement or Benefit Plan currently in effect would    
not be characterized as an "excess parachute payment" (as such term is      
defined in Section 280G(b)(l) of the Code).                                 

(l) Labor Agreements. Neither the Company nor any of its subsidiaries is
a party to any collective bargaining agreement or other labor agreement     
with any union or labor organization and the Company does not know of any   
activity or proceeding of any labor organization (or representative         
thereof) to organize any such employees. The Company and its subsidiaries   
are not subject to any pending, or to the knowledge of the Company,         
threatened (i) material unfair labor practice, employment discrimination or 
other complaint, (ii) strike or lockout or material dispute, slowdown or    
work stoppage or (iii) material claim, suit, action or governmental         
investigation, in respect of which any director, officer, employee or agent 
of the Company or any of its subsidiaries is or may be entitled to claim    
indemnification from the Company or and subsidiary.                         

(m) Compliance with Applicable Laws. (i) Each of the Company and its    
subsidiaries has in effect all Federal, state, local and foreign            
governmental approvals, authorizations, certificates, filings, franchises,  
licenses, notices, permits and rights ("Permits") necessary for it to own,  
lease or operate its properties and assets and to carry on its business as  
now conducted, and there has occurred no default under any such Permit,     
except for the lack of Permits and for defaults under Permits which lack or 
default individually or in the aggregate would not reasonably be expected   
to have a material adverse effect on the Company. Except as disclosed in    
the SEC Documents filed prior to the date of this Agreement, the Company    
and its subsidiaries are in compliance with all applicable statutes, laws,  
ordinances, rules, orders and regulations of                                

A-12  

DEF 14A
79th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 79th
any Governmental Entity, except for noncompliance which individually or in  
the aggregate would not have a material adverse effect on the Company.      

(ii) To the knowledge of the Company, the Company and each of its       
subsidiaries is, and has been, and each of the Company's former             
subsidiaries, while subsidiaries of the Company, was, in compliance in all  
material respects with all applicable Environmental Laws, except for        
noncompliance which individually or in the aggregate would not have a       
material adverse effect on the Company. The term "Environmental Laws" means 
any Federal, state, local or foreign statute, code, ordinance, rule,        
regulation, policy, guideline, permit, consent, approval, license,          
judgment, order, writ, decree, injunction or other authorization, including 
the requirement to register underground storage tanks, relating to: (A)     
emissions, discharges, releases or threatened releases of Hazardous         
Material (as hereinafter defined) into the environment, including, without  
limitation, into ambient air, soil, sediments, land surface or subsurface,  
buildings or facilities, surface water, groundwater, publicly owned         
treatment works, septic systems or land; or (B) the generation, treatment,  
storage, disposal, use, handling, manufacturing, transportation or shipment 
of Hazardous Material.                                                      

(iii) During the period of ownership or operation by the Company and its
subsidiaries of any of their respective current or previously owned or      
leased properties, there have been no releases of Hazardous Material in,    
on, under or affecting such properties or, to the knowledge of the Company, 
any surrounding site, except in each case for those which individually or   
in the aggregate are not reasonably likely to have a material adverse       
effect on the Company. Prior to the period of ownership or operation by the 
Company and its subsidiaries of any of their respective current or          
previously owned or leased properties, to the knowledge of the Company, no  
Hazardous Material was generated, treated, stored, disposed of, used,       
handled or manufactured at, or transported, shipped or disposed of from,    
such currently or previously owned or leased properties, and there were no  
releases of Hazardous Material in, on, under or affecting any such property 
or any surrounding site, except in each case for those which individually   
or in the aggregate are not reasonably likely to have a material adverse    
effect on the Company. The term "Hazardous Material" means (A) hazardous    
materials, contaminants, constituents, medical wastes, hazardous or         
infectious wastes and hazardous substances as those terms are defined in    
the following statutes and their implementing regulations: the Hazardous    
Materials Transportation Act, 49 U.S.C. (S) 1801 et seq., the Resource      
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq., the              
Comprehensive Environmental Response, Compensation and Liability Act, as    
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. (S)  
9601 et seq., the Clean Water Act, 33 U.S.C. (S) 1251 et seq. and the Clean 
Air Act, 42 U.S.C. (S) 7401 et seq., (B) petroleum, including crude oil and 
any fractions thereof, (C) natural gas, synthetic gas and any mixtures      
thereof, (D) asbestos and/or asbestos-containing material, and (E) PCBs, or 
materials or fluids containing PCBs in excess of 50 ppm.                    

(n) Contracts; Debt Instruments. Except as disclosed in Schedule 3.1(n) 
of the Company Disclosure Schedule, there is no contract or agreement that  
is material to the business, financial condition or results of operations   
of the Company and its subsidiaries taken as a whole ("Material Contract"). 
Each Material Contract of the Company is valid and binding and in full      
force and effect, and neither the Company nor any of its subsidiaries is in 
violation of or in default under (nor does there exist any condition which  
upon the passage of time or the giving of notice, or both, would cause such 
a violation of or default under) any loan or credit agreement, note, bond,  
mortgage, indenture or lease, or any other Material Contract to which it is 
a party or by which it or any of its properties or assets is bound, except  
for such failures to be valid and binding and for violations or defaults    
that would not, individually or in the aggregate, reasonably be expected to 
result in a material adverse effect on the Company. Set forth in Section    
3.1(n) of the Company Disclosure Schedule is a description of any material  
changes to the amount and terms of the indebtedness of the Company and its  
subsidiaries as described in the Company's Form 10-Q for the quarter ended  
January 23, 1998. The Company and its subsidiaries are not, and after the   
Effective Time neither the Surviving Corporation nor Parent will be (by     
reason of any agreement to which the Company is a party), subject to any    
noncompetition or similar restriction on their respective businesses        

(o) Title to Properties. (i) The Company and its subsidiaries have good 
and marketable title to, or valid leasehold interests in, all their         
material properties and assets except for such as are no longer used or     

A-13  

DEF 14A
80th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 80th
useful in the conduct of their businesses or as have been disposed of in    
the ordinary course of business and except for defects in title, easements, 
restrictive covenants and similar encumbrances or impediments that,         
individually or in the aggregate, would not have a material adverse effect  
on the Company.                                                             

(ii) Each of the Company and its subsidiaries has complied with the 
terms of all material leases to which it is a party and under which it  
is in occupancy, and all such leases are in full force and effect,      
except for such failures to comply or to be in full force and effect    
which would not, individually or in the aggregate, have a material      
adverse effect on the Company. Each of the Company and its subsidiaries 
enjoys peaceful and undisturbed possession under all such material      
leases, except for the failures to do so which would not, individually  
or in the aggregate, have a material adverse effect on the Company.     

(p) Intellectual Property. Except as would not, individually and in the 
aggregate, reasonably be expected to have a material adverse effect on the  
Company, (i) the Company and each of its subsidiaries owns, has the right   
to acquire or is licensed or otherwise has the right to use (in each case,  
free and clear of any liens or encumbrances of any kind), all Intellectual  
Property (as defined below) used in or necessary for the conduct of its     
business as currently conducted or as currently proposed to be conducted,   
(ii) no claims are pending or, to the knowledge of the Company, threatened, 
that the Company or any of its subsidiaries is infringing on or otherwise   
violating the rights of any person with regard to any Intellectual          
Property, and (iii) to the knowledge of the Company, no person is           
infringing on or otherwise violating any right of the Company or any of its 
subsidiaries with respect to any Intellectual Property owned by and/or      
licensed to the Company or its subsidiaries. For purposes of this           
Agreement, "Intellectual Property" shall mean patents, copyrights,          
trademarks (registered or unregistered), service marks, brand names, trade  
dress, trade names, the goodwill associated with the foregoing and          
registrations in any jurisdiction of, and applications in any jurisdiction  
to register, the foregoing; and trade secrets and rights in any             
jurisdiction to limit the use or disclosure thereof by any person.          

(q) Accounting Matters. Neither the Company nor, to its best knowledge, 
any of its affiliates has taken or agreed to take any action or has         
knowledge of any fact or circumstance relating to the Company that would    
prevent Parent from accounting for the business combination to be effected  
by the Merger as a pooling-of-interests.                                    

 (r) Opinion of Financial Advisor. The Company has received the opinion of
Salomon Smith Barney, dated the date of this Agreement, to the effect that, 
as of such date, the consideration to be received in the Merger by the      
Company's stockholders is fair to the Company's stockholders from a         
financial point of view, and a signed copy of such opinion has been         
delivered to Parent.                                                        

(s) Brokers. No broker, investment banker, financial advisor or other   
person, other than Salomon Smith Barney, the fees and expenses of which     
have been disclosed to Parent and will be paid by the Company, is entitled  
to any broker's, finder's, financial advisor's or other similar fee or      
commission in connection with the transactions contemplated by this         
Agreement based upon arrangements made by or on behalf of the Company.      

(t) State Takeover Statutes. The Company has taken all requisite action 
to render inapplicable to this Agreement, the Stock Option Agreement and    
the Stockholder Support Agreements and the transactions contemplated hereby 
and thereby the provisions of Sections 19.010 through 19.050 of the BCA and 
such action is effective at the date of this Agreement. To the best of the  
Company's knowledge, no other state takeover statute or similar statute or  
regulation applies or purports to apply to the Merger, this Agreement or    
the Stock Option Agreement or any of the transactions contemplated by this  
Agreement, the Stock Option Agreement or the Stockholder Support            
Agreements.                                                                 

(u) Rights Agreement. The Company and the Company Board have authorized 
and taken all necessary action to enter into an amendment to the Rights     
Agreement (without redeeming the Rights) providing that (i) neither the     
execution or delivery of this Agreement, the Stock Option Agreement or the  
Stockholder Support Agreements nor the consummation of the transactions     
contemplated hereby or thereby, including the Merger, will (x) cause any    
Rights issued pursuant to the Rights Agreement to become exercisable or to  

A-14  

DEF 14A
81st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 81st
separate from the stock certificates to which they are attached, (y) cause  
Parent, Sub or any of their Affiliates to be an Acquiring Person (as each   
such term is defined in the Rights Agreement), or (z) trigger other         
provisions of the Rights Agreement, including giving rise to a Distribution 
Date (as such term is defined in the Rights Agreement), and (ii) as of      
immediately prior to the Effective Time, neither the Company nor Parent     
will have any obligations under the Rights or the Rights Agreement and the  
holders of the Rights will have no rights under the Rights or the Rights    
Agreement, and such amendment shall be in full force and effect from and    
after the date hereof.                                                      

Section 3.2. Representations and Warranties of Parent and Sub. Except as    
disclosed by specific reference to the Disclosure Schedule delivered by Parent  
to the Company prior to the execution of this Agreement (the "Parent            
Disclosure Schedule"), Parent and Sub represent and warrant to the Company as   
follows:                                                                        

(a) Organization, Standing and Corporate Power. Each of Parent and each 
of its subsidiaries (including Sub) is a corporation duly organized,        
validly existing and in good standing under the laws of the jurisdiction in 
which it is incorporated and has the requisite corporate power and          
authority to carry on its business as now being conducted. Each of Parent   
and each of its subsidiaries (including Sub) is duly qualified or licensed  
to do business and is in good standing in each jurisdiction in which the    
nature of its business or the ownership or leasing of its properties makes  
such qualification or licensing necessary, other than in such jurisdictions 
where the failure to be so qualified or licensed (individually or in the    
aggregate) would not have a material adverse effect on Parent. Parent has   
delivered to the Company complete and correct copies of its certificate of  
incorporation and by-laws and the certificate of incorporation and by-laws  
of Sub, in each case as amended to the date of this Agreement.              

(b) Capital Structure. The authorized capital stock of Parent as of the 
date of this Agreement consists of 125,000,000 shares of Parent Common      
Stock and 15,000,000 shares of preferred stock, par value $.01 per share.   
At the close of business on April 22, 1998, (i) 58,560,370 shares of Parent 
Common Stock and no shares of preferred stock were issued and outstanding,  
(ii) 5,797,606 shares of Parent Common Stock were held by Parent in its     
treasury, and (iii) 1,367,176 shares of Parent Common Stock were reserved   
for issuance upon exercise of outstanding employee stock options to         
purchase shares of Parent Common Stock. Except as set forth above, at the   
close of business on April 22, 1998 no shares of capital stock or other     
voting securities of the Parent were issued, reserved for issuance or       
outstanding. All outstanding shares of capital stock of Parent are, and all 
shares which may be issued pursuant to this Agreement will be, when issued, 
duly authorized, validly issued, fully paid and nonassessable and not       
subject to preemptive rights. As of the date of this Agreement, there are   
no bonds, debentures, notes or other indebtedness of Parent having the      
right to vote (or convertible into, or exchangeable for, securities having  
the right to vote) on any matters on which stockholders of Parent may vote. 
Except as set forth above, as of the date of this Agreement, there are no   
outstanding securities, options, warrants, calls, rights, commitments,      
agreements, arrangements or undertakings of any kind to which Parent or any 
of its Significant Subsidiaries is a party or by which any of them is bound 
obligating Parent or any of its Significant Subsidiaries to issue, deliver  
or sell, or cause to be issued, delivered or sold, additional shares of     
capital stock or other voting securities of Parent or of any of its         
Significant Subsidiaries or obligating Parent or any of its Significant     
Subsidiaries to issue, grant, extend or enter into any such security,       
option, warrant, call, right, commitment, agreement, arrangement or         
undertaking. As of the date of this Agreement, there are no outstanding     
contractual obligations of Parent or any of its Significant Subsidiaries to 
repurchase, redeem or otherwise acquire any shares of capital stock of      
Parent or its Significant Subsidiaries. As of the date of this Agreement,   
the authorized capital stock of Sub consists of 1,000 shares of common      
stock, par value $.01 per share, all of which have been validly issued, are 
fully paid and nonassessable and are owned by Parent free and clear of any  
Liens. For purposes of this Agreement, "Significant Subsidiary" means any   
subsidiary that constitutes a significant subsidiary within the meaning of  
Rule 1-02 of Regulation S-X of the SEC.                                     

(c) Authority; Noncontravention. Parent and Sub have the requisite      
corporate power and authority to enter into this Agreement and the Stock    
Option Agreement and to consummate the transactions contemplated hereby and 
thereby. The execution and delivery of this Agreement and the Stock Option  

A-15  

DEF 14A
82nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 82nd
Agreement and the consummation of the transactions contemplated hereby and  
thereby have been duly authorized by all necessary corporate action on the  
part of Parent and Sub. This Agreement and the Stock Option Agreement have  
been duly executed and delivered by Parent (and, in the case of this        
Agreement, Sub) and constitutes a valid and binding obligation of each such 
party, enforceable against each such party in accordance with their terms.  
The execution and delivery of this Agreement and the Stock Option Agreement 
do not, and the consummation of the transactions contemplated hereby and    
thereby and compliance with the provisions hereof and thereof will not,     
conflict with, or result in any violation of, or default (with or without   
notice or lapse of time, or both) under, or require the consent of (or the  
giving notice to) a third party with respect to, or give rise to a right of 
termination, cancellation or acceleration of any obligation or to loss of a 
material benefit under, or result in the creation of any Lien upon any of   
the properties or assets of Parent or any of its subsidiaries under, (i)    
the certificate of incorporation or by-laws of Parent or Sub or the         
comparable charter or organizational documents of any other subsidiary of   
Parent, (ii) any loan or credit agreement, note, bond, mortgage, indenture, 
lease or other agreement, instrument, permit, concession, franchise or      
license applicable to Parent or any of its subsidiaries or their respective 
properties or assets as of the date hereof, or (iii) subject to the         
governmental filings and other matters referred to in the following         
sentence, any judgment, order, decree, statute, law, ordinance, rule or     
regulation applicable to Parent or any of its subsidiaries or their         
respective properties or assets, other than, in the case of clauses (ii) or 
(iii), any such conflicts, violations, defaults, rights or Liens that       
individually or in the aggregate would not (x) have a material adverse      
effect on Parent, (y) impair in any material respect the ability of Parent  
and Sub to perform their respective obligations under this Agreement or the 
Stock Option Agreement, or (z) prevent or materially delay the consummation 
of any of the transactions contemplated hereby or thereby. No consent,      
approval, order or authorization of, or registration, declaration or filing 
with any Governmental Entity is required by Parent or any of its            
subsidiaries in connection with the execution and delivery of this          
Agreement or the Stock Option Agreement or the consummation by Parent or    
Sub, as the case may be, of any of the transactions contemplated hereby or  
thereby, except for (i) the filing with the Specified Agencies of a         
premerger notification and report form under the HSR Act, (ii) the filing   
with the SEC of (x) the Form S-4 and (y) such reports under Sections 13(a), 
13(d) and 16(a) of the Exchange Act as may be required in connection with   
this Agreement and the Stock Option Agreement and the transactions          
contemplated hereby and thereby, (iii) the filing of the Articles of Merger 
with the Washington Secretary of State and appropriate documents with the   
relevant authorities of other states in which the Company is qualified to   
do business, and (iv) such other consents, approvals, orders,               
authorizations, registrations, declarations and filings, including under    
(x) the laws of any foreign country in which the Company or any of its      
subsidiaries conducts any business or owns any property or assets or (y)    
the "takeover" or "blue sky" laws of various states, the failure of which   
to be obtained or made would not, individually, or in the aggregate, have a 
material adverse effect on Parent or prevent or materially delay the        
consummation of any of the transactions contemplated by this Agreement or   
the stock Option Agreement.                                                 

(d) SEC Documents; Financial Statements. Since January 1, 1995, Parent  
has filed with the SEC all required reports and forms and other documents   
(the "Parent SEC Documents"). As of their respective dates, the Parent SEC  
Documents complied in all material respects with the requirements of the    
Securities Act or the Exchange Act, as the case may be, and the rules and   
regulations of the SEC promulgated thereunder applicable to such Parent SEC 
Documents, and none of the Parent SEC Documents contained any untrue        
statement of a material fact or omitted to state a material fact required   
to be stated therein or necessary in order to make the statements therein,  
in light of the circumstances under which they were made, not misleading.   
Except to the extent that information contained in any Parent SEC Document  
has been revised or superseded by a later-filed Parent SEC Document filed   
and publicly available prior to the date of this Agreement, none of the     
Parent SEC Documents contains any untrue statement of a material fact or    
omits to state any material fact required to be stated therein or necessary 
in order to make the statements therein, in light of the circumstances      
under which they were made, not misleading. The financial statements of     
Parent included in the Parent SEC Documents comply as to form in all        
material respects with applicable accounting requirements and the published 
rules and regulations of the SEC with respect thereto, have been prepared   
in accordance with generally accepted accounting principles (except, in the 
case of unaudited                                                           

A-16  

DEF 14A
83rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 83rd
statements, as permitted by Form 10-Q of the SEC) applied on a consistent   
basis during the periods involved (except as may be indicated in the notes  
thereto) and fairly present the consolidated financial position of Parent   
and its consolidated subsidiaries as of the dates thereof and the           
consolidated results of their operations and cash flows for the periods     
then ended (subject, in the case of unaudited statements, to normal year-   
end adjustments). Except as set forth in the Parent SEC Documents, and      
except for liabilities and obligations incurred in the ordinary course of   
business consistent with past practice since the date of the most recent    
consolidated balance sheet included in the Parent SEC Documents, neither    
Parent nor any of its subsidiaries has any material liabilities or          
obligations of any nature (whether accrued, absolute, contingent or         
otherwise) required by generally accepted accounting principles to be       
recognized or disclosed on a consolidated balance sheet of Parent and its   
consolidated subsidiaries or in the notes thereto.                          

(e) Information Supplied. None of the information supplied or to be     
supplied by Parent or Sub for inclusion or incorporation by reference in    
(i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at   
any time it is amended or supplemented or at the time it becomes effective  
under the Securities Act, contain any untrue statement of a material fact   
or omit to state any material fact required to be stated therein or         
necessary to make the statements therein not misleading or (ii) the Proxy   
Statement will, at the date the Proxy Statement is first mailed to the      
Company's stockholders or at the time of the Stockholders' Meeting, contain 
any untrue statement of a material fact or omit to state any material fact  
required to be stated therein or necessary in order to make the statements  
therein, in light of the circumstances under which they are made, not       
misleading (provided that Parent shall not be liable in damages for breach  
of this representation except to the extent the information which is the    
subject of such liability was provided in writing). The Form S-4 will       
comply as to form in all material respects with the requirements of the     
Securities Act and the rules and regulations promulgated thereunder, except 
that no representation or warranty is made by Parent or Sub with respect to 
statements made or incorporated by reference in either the Form S-4 or the  
Proxy Statement based on information supplied by the Company specifically   
for inclusion or incorporation by reference therein.                        

(f) Absence of Certain Changes or Events. Except as disclosed in the    
Parent SEC Documents filed prior to the date of this Agreement, since       
January 1, 1998, Parent has conducted its business only in the ordinary     
course consistent with prior practice and there has not been (i) any        
material adverse change in Parent, (ii) except for regular quarterly cash   
dividends (in an amount determined in a manner consistent with Parent's     
past practice) with customary record and payment dates, any declaration,    
setting aside or payment of any dividend or distribution (whether in cash,  
stock or property) with respect to any of Parent's capital stock, (iii) any 
split, combination or reclassification of any of its capital stock (other   
than the previously announced stock split proposed by Parent) or any        
issuance or the authorization of any issuance of any other securities in    
respect of, in lieu of or in substitution for shares of its capital stock,  
(iv) any damage, destruction or loss, whether or not covered by insurance,  
that has or would reasonably be expected to have a material adverse effect  
on Parent, (v) any change in accounting methods, principles or practices by 
Parent materially affecting its assets, liabilities or business except      
insofar as may have been required by a change in generally accepted         
accounting principles, or (vi) any agreement to do any of the things        
described in the preceding clauses (i) through (v).                         

(g) Litigation. Except as disclosed in the Parent SEC Documents filed   
prior to the date of this Agreement, as of the date of this Agreement there 
is no suit, action or proceeding pending or, to the knowledge of Parent,    
threatened against Parent or any of its subsidiaries that, individually or  
in the aggregate, would reasonably be expected to (i) have a material       
adverse effect on Parent, (ii) impair in any material respect the ability   
of Parent to perform its obligations under this Agreement, or (iii) prevent 
the consummation of any of the transactions contemplated by this Agreement, 
nor is there any judgment, decree, injunction, rule or order of any         
Governmental Entity or arbitrator outstanding against Parent or any of its  
subsidiaries having, or which is reasonably likely to have, any effect      
referred to in the foregoing clauses (i) through (iii).                     

(h) Compliance with Applicable Laws. (i) Each of Parent and its         
subsidiaries has in effect all Permits necessary for it to own, lease or    
operate its properties and assets and to carry on its business as now       

A-17  

DEF 14A
84th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 84th
conducted, and there has occurred no default under any such Permit, except  
for the lack of Permits and for defaults under Permits which lack or        
default individually or in the aggregate would not reasonably be expected   
to have a material adverse effect on Parent. Except as disclosed in the     
Parent SEC Documents filed prior to the date of this Agreement, Parent and  
its subsidiaries are in compliance with all applicable statutes, laws,      
ordinances, rules, orders and regulations of any Governmental Entity,       
except for possible noncompliance which individually or in the aggregate    
would not have a material adverse effect on Parent.                         

(ii) To the knowledge of Parent, Parent and each of its subsidiaries is,
and has been, and each of Parent's former subsidiaries, while subsidiaries  
of Parent, was, in compliance in all material respects with all applicable  
Environmental Laws, except for possible noncompliance which individually or 
in the aggregate would not have a material adverse effect on Parent.        

(i) Accounting Matters; Tax Treatment. Neither Parent nor, to its best  
knowledge, any of its affiliates has taken or agreed to take any action or  
has knowledge of any fact or circumstance relating to Parent that would     
prevent Parent from accounting for the business combination to be effected  
by the Merger as a pooling-of-interests. Neither Parent nor any of its      
subsidiaries has taken or agreed to take any action or has any knowledge of 
any fact or circumstance that might prevent or impede the Merger from       
qualifying as a reorganization within the meaning of Sections 368(a)(1)(A)  
and (a)(2)(E) of the Code.                                                  

(j) Brokers. No broker, investment banker, financial advisor or other   
person, other than Merrill Lynch & Co., the fees and expenses of which will 
be paid by Parent, is entitled to any broker's, finder's, financial         
advisor's or other similar fee or commission in connection with the         
transactions contemplated by this Agreement based upon arrangements made by 
or on behalf of Parent or Sub.                                              

(k) Interim Operations of Sub. Sub was formed solely for the purpose of 
engaging in the transactions contemplated hereby, has engaged in no other   
business activities and has conducted its operations only as contemplated   
hereby.                                                                     

ARTICLE IV  

Covenants Relating To Conduct Of Business 

Section 4.1. Conduct of Business. (a) Conduct of Business by the            
Company. Between the date of this Agreement and the Effective Time, the         
Company shall, and shall cause its subsidiaries to, carry on their respective   
businesses in the ordinary course and use all reasonable efforts to preserve    
intact their current business organizations, keep available the services of     
their current officers and employees and preserve their relationships with      
customers, suppliers and others having business dealings with them. Without     
limiting the generality of the foregoing, between the date of this Agreement    
and the Effective Time, except (a) as contemplated by this Agreement or (b) as  
set forth in Section 4.1(a) of the Company Disclosure Schedule, the Company     
shall not, and shall not permit any of its subsidiaries, without the prior      
written approval of Parent, to:                                                 

(i) (A) declare, set aside or pay (whether in cash, stock, property, or 
otherwise) any dividends on, or make any other distributions in respect of, 
any of its capital stock, other than (x) the regular quarterly dividend     
declared by the Company with a record date of April 24, 1998 and (y)        
dividends and distributions by any direct or indirect wholly owned          
subsidiary of the Company to its parent, (B) split, combine or reclassify   
any of its capital stock, or issue or authorize the issuance of any other   
securities in respect of, in lieu of or in substitution for shares of its   
capital stock, or (C) purchase, redeem or otherwise acquire any shares of   
capital stock of the Company or any of its subsidiaries or any other        
securities thereof or any rights, warrants or options to acquire any such   
shares or other securities;                                                 

 (ii) other than the issuance of Company Common Stock upon the exercise of
Stock Options outstanding on the date of this Agreement in accordance with  
their present terms or in accordance with the present terms of any          
employment agreements existing on the date of this Agreement and described  
in Section 4.1(a) of the Company Disclosure Schedule, (A) issue, deliver,   
sell, award, pledge, dispose of or otherwise encumber or authorize or       
propose the issuance, delivery, grant, sale, award, pledge or other         

A-18  

DEF 14A
85th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 85th
encumbrance (including limitations in voting rights) or authorization of,   
any shares of its capital stock, any other voting securities or any         
securities convertible into, or any rights, warrants or options to acquire, 
any such shares, voting securities or convertible securities, (B) amend or  
otherwise modify the terms of any such rights, warrants or options, or (C)  
accelerate the vesting of any of the Stock Options;                         

 (iii) amend its certificate of incorporation, by-laws or other comparable
charter or organizational documents, or amend or take any other action with 
respect to the Rights Agreement or the Rights that is adverse to Parent;    

(iv) acquire or agree to acquire (for cash or shares of stock or        
otherwise) (A) by merging or consolidating with, or by purchasing a         
substantial portion of the assets of, or by any other manner, any business  
or any corporation, partnership, joint venture, association or other        
business organization or division thereof or (B) any assets except          
purchases of inventory in the ordinary course of business consistent with   
past practice;                                                              

(v) mortgage or otherwise encumber or subject to any Lien, or sell,     
lease, exchange or otherwise dispose of any of, its properties or assets,   
except for sales of its properties or assets in the ordinary course of      
business consistent with past practice;                                     

(vi) (A) incur any indebtedness for borrowed money (including under     
existing credit facilities) or guarantee any such indebtedness of another   
person, issue or sell any debt securities or warrants or other rights to    
acquire any debt securities of the Company or any of its subsidiaries,      
guarantee any debt securities of another person, enter into any "keep well" 
or other agreement to maintain any financial statement condition of another 
person or enter into any arrangement having the economic effect of any of   
the foregoing, except for the incurrence of indebtedness to finance the     
Company's working capital needs which, in the aggregate, do not exceed      
$1,000,000 provided that the terms of any such indebtedness (including any  
prepayment penalty) shall be subject to the approval of Parent, or (B) make 
any loans, advances or capital contributions to, or investments in, any     
other person, other than to the Company or any direct or indirect wholly    
owned subsidiary of the Company;                                            

(vii) make or agree to make any new capital expenditures which,         
individually, exceed $250,000 or which, in the aggregate, exceed            
$2,000,000;                                                                 

(viii) make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,       
arbitration, investigation, audit or controversy relating to taxes, or      
change any of its methods of reporting income or deductions for Federal     
income tax purposes, except as may be required by applicable law;           

(ix) pay, discharge or satisfy any claims, liabilities or obligations   
(absolute, accrued, asserted or unasserted, contingent or otherwise), other 
than the payment, discharge or satisfaction, in the ordinary course of      
business consistent with past practice or in accordance with their terms,   
of liabilities reflected or reserved against in, or contemplated by, the    
most recent consolidated financial statements (or the notes thereto) of the 
Company included in the SEC Documents or incurred in the ordinary course of 
business consistent with past practice;                                     

(x) (A) increase the rate or terms of compensation payable or to become 
payable generally to any of the Company's directors, officers or employees, 
(B) pay or agree to pay any pension, retirement allowance or other employee 
benefit not provided for by any existing Pension Plan, Benefit Plan or      
employment agreement described in the SEC Documents filed prior to the date 
of this Agreement, (C) commit itself to any additional pension, profit      
sharing, bonus, incentive, deferred compensation, stock purchase, stock     
option, stock appreciation right, group insurance, severance pay,           
continuation pay, termination pay, retirement or other employee benefit     
plan, agreement or arrangement, or increase the rate or terms of any        
employee plan or benefit arrangement, (D) enter into any employment         
agreement with or for the benefit of any person, or (E) increase the rate   
of compensation under or otherwise change the terms of any existing         
employment agreement; provided, however, that nothing in this clause (x)    
shall preclude payments under the terms of the existing incentive           
compensation plans of the Company in accordance with past practice;         

A-19  

DEF 14A
86th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 86th
(xi) except in the ordinary course of business consistent with past     
practice, modify, amend, terminate, renew or fail to use reasonable         
business efforts to renew any material contract or agreement to which the   
Company or any subsidiary is a party or waive, release or assign any        
material rights or claims; or                                               

(xii) authorize any of, or commit or agree to take any of, the foregoing
actions.                                                                    

(b) Conduct of Business by Parent. During the period from the date of this  
Agreement to the Effective Time, Parent shall, and shall cause its              
subsidiaries to, carry on their respective businesses in the ordinary course    
and use all reasonable efforts to preserve their relationships with customers,  
suppliers and others having business dealings with them; provided that the      
foregoing shall not prevent Parent or any of its subsidiaries from              
discontinuing or disposing of any part of its assets or business or from        
acquiring any assets or businesses or from entering into any financing          
transactions if such action is, in the judgment of Parent, desirable in the     
conduct of the business of Parent and its subsidiaries. Without limiting the    
generality of the foregoing, during the period from the date of this Agreement  
to the Effective Time, except as (i) contemplated by this Agreement or (ii) as  
set forth in a writing delivered to the Company prior to the execution hereof,  
Parent shall not, and shall not permit any of its subsidiaries to:              

(i) (A) declare, set aside or pay (whether in cash or property) any     
dividends on, or make any other distributions in respect of, any capital    
stock other than dividends and distributions by any direct or indirect      
wholly owned subsidiary of Parent to its parent and except for regular      
quarterly cash dividends (in an amount determined in a manner consistent    
with Parent's past practice) declared by the Board of Directors of Parent   
with customary record and payment dates, (B) split, combine or reclassify   
any of its capital stock (other than the previously announced stock split   
proposed by Parent) or issue or authorize the issuance of any other         
securities in respect of, in lieu of or in substitution for shares of       
Parent's capital stock or (C) purchase, redeem or otherwise acquire any     
shares of Parent Common Stock;                                              

(ii) amend its certificate of incorporation (except for the purpose of  
increasing its authorized capitalization), by-laws or other comparable      
charter or organizational documents in a manner which would reasonably be   
expected to be materially adverse to the stockholders of the Company; or    

(iii) authorize, or commit or agree to take any of, the foregoing       
actions.                                                                    

(c) Other Actions. The Company and Parent shall not, and shall not permit   
any of their respective subsidiaries to, take any action that would result in   
(i) any of the representations and warranties of such party set forth in this   
Agreement that are qualified as to materiality, becoming untrue or (ii) any of  
such representations and warranties that are not so qualified becoming untrue   
in any material respect.                                                        

Section 4.2. No Solicitation. (a) The Company shall not, nor shall it permit
any of its subsidiaries to, nor shall it authorize or permit any officer,       
director or employee of, or any investment banker, attorney or other advisor    
or representative of, the Company or any of its subsidiaries to, (i) solicit    
or initiate, or encourage the submission of, any, Takeover Proposal (as such    
term is defined below), (ii) participate in any discussions or negotiations     
regarding, or furnish to any person any information with respect to, or take    
any other action to facilitate any inquiries or the making of any proposal      
that constitutes, or may reasonably be expected to lead to, any Takeover        
Proposal; provided, however, that prior to the Effective Time, to the extent    
required by the fiduciary obligations of the Board of Directors of the          
Company, as determined in good faith by the Board of Directors after receipt    
of the advice of outside counsel, the Company may, (A) in response to an        
unsolicited request therefor, furnish information with respect to the Company   
to any person pursuant to a confidentiality agreement no less favorable to the  
Company than the Confidentiality Agreement (as defined in Section 5.2) and      
discuss such information and the terms of this Section 4.2 (but not the terms   
of any possible Takeover Proposal) with such person and (B) upon receipt by     
the Company of a Takeover Proposal, following delivery to Parent of the notice  
required pursuant to Section 4.2(c), participate in negotiations regarding      
such Takeover Proposal. For purposes of this Agreement, "Takeover Proposal")    
means any proposal or offer (whether or not in writing and whether or not       
delivered to the Company's shareholders generally) for an Alternative           
Transaction. An "Alternative Transaction" means a merger or other business      
combination involving the Company or any of its Material Subsidiaries or any    
acquisition in any manner, directly or indirectly, of any voting securities     
of, or in                                                                       

A-20  

DEF 14A
87th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 87th
excess of 10% of the book value of the assets of, the Company or any of its     
Material Subsidiaries, or any other transaction that would involve the          
transfer or potential transfer of an interest in or control of the Company or   
any of its Material Subsidiaries, other than the transactions contemplated by   
this Agreement.                                                                 

(b) Neither the Board of Directors of the Company nor any committee thereof 
shall (i) withdraw or modify, or propose to withdraw or modify (other than a    
nonpublic proposal by a committee to the full Board), in a manner adverse to    
Parent or Sub, the approval or recommendation by such Board of Directors or     
any such committee of this Agreement or the Merger, (ii) approve or recommend,  
or propose to approve or recommend (other than a nonpublic proposal by a        
committee to the full Board), any Takeover Proposal or (iii) enter into any     
agreement with respect to any Takeover Proposal. Notwithstanding the            
foregoing, in the event the Board of Directors of the Company receives a        
Takeover Proposal that, in the exercise of its fiduciary obligations (as        
determined in good faith by the Board of Directors after receipt of the         
written advice of outside counsel), it determines to be a Superior Proposal     
(as defined below), the Board of Directors may (subject to the following        
sentences) withdraw or modify its approval or recommendation of this Agreement  
or the Merger, approve or recommend any such Superior Proposal, enter into an   
agreement with respect to such Superior Proposal or terminate this Agreement,   
in each case at any time after the second business day following Parent's       
receipt of written notice (a "Notice of Superior Proposal") advising Parent     
that the Board of Directors has received a Superior Proposal, specifying the    
material terms and conditions of such Superior Proposal and identifying the     
person making such Superior Proposal. In addition, if the Company enters into   
an agreement with respect to any Takeover Proposal, it shall concurrently with  
entering into such agreement pay, or cause to be paid, to Parent the            
Termination Fee (as defined in Section 5.8(b)) and the Expense Fee (as defined  
in Section 5.8(b)) in accordance with Section 5.8(b). For purposes of this      
Agreement, a "Superior Proposal" means any bona fide Takeover Proposal to       
acquire, directly or indirectly, for consideration consisting of cash and/or    
securities, more than 50% of the shares of Company Common Stock then            
outstanding or all or substantially all the assets of the Company, and          
otherwise on terms which the Board of Directors of the Company determines in    
its good faith reasonable judgment (after receipt of the written advice of a    
financial advisor of nationally recognized reputation) to be more favorable     
from a financial point of view to the Company's stockholders than the Merger.   
Nothing contained herein shall prohibit the Company from taking and disclosing  
to its stockholders a position contemplated by Rule 14e-2(a) under the          
Exchange Act or otherwise making any disclosures required by the fiduciary      
obligations of the Board of Directors of the Company that would not violate or  
be inconsistent with the Company's obligations under this Agreement.            

(c) In addition to the obligations of the Company set forth in paragraph    
(b), the Company shall promptly advise Parent orally and in writing of any      
request for information or of any Takeover Proposal, or any inquiry with        
respect to or which could reasonably be expected to lead to any Takeover        
Proposal, the material terms and conditions of such request, Takeover Proposal  
or inquiry, and the identity of the person making any such Takeover Proposal    
or inquiry. The Company shall keep Parent informed on a current basis of the    
status and details of any such request, Takeover Proposal or inquiry.           

ARTICLE V 

Additional Agreements 

Section 5.1. Preparation of Form S-4 and the Proxy Statement; Stockholders' 
Meeting. (a) As promptly as practicable after the execution of this Agreement,  
(i) the Company shall prepare and file with the SEC a proxy statement relating  
to the meeting of the Company's stockholders to be held to obtain the Company   
Stockholder Approval, respectively (together with any amendments and            
supplements thereof or supplements thereto, the "Proxy Statement"), and (ii)    
Parent shall prepare and file with the SEC a registration statement on Form S-  
4 (together with all amendments thereto, the "Form S-4") in which the Proxy     
Statement shall be included as a prospectus, in connection with the             
registration under the Securities Act of the shares of Parent Common Stock to   
be issued to the stockholders of the Company pursuant to the Merger. Each of    
Parent and the Company shall use all reasonable efforts to cause the Form S-4   
to become effective as promptly as practicable, and shall take all or           

A-21  

DEF 14A
88th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 88th
any action required under any applicable Federal or state securities laws in    
connection with the issuance of shares of Parent Common Stock pursuant to the   
Merger. Each of Parent and the Company shall furnish all information            
concerning itself to the other as the other may reasonably request in           
connection with such actions and the preparation of the Form S-4 and Proxy      
Statement. As promptly as practicable after the Form S-4 shall have become      
effective, the Company shall mail the Proxy Statement to its stockholders.      

(b) Stockholders' Meeting. As soon as practicable following the date of this
Agreement, the Company shall call and hold a meeting of its stockholders (the   
"Company Stockholders' Meeting"), for the purpose of obtaining the Company      
Stockholder Approval. The Company shall use its reasonable efforts to solicit   
from its stockholders proxies, and shall take all other action necessary or     
advisable to secure the vote or consent of stockholders required by applicable  
law to obtain the Company Stockholder Approval and, through its Board of        
Directors, shall recommend to its stockholders the obtaining of the Company     
Stockholder Approval, except to the extent that the Board of Directors of the   
Company shall have withdrawn or modified its approval or recommendation of      
this Agreement or the Merger in accordance with the provisions of Section       
4.2(b).                                                                         

Section 5.2. Access to Information; Confidentiality. Each of the Company and
Parent shall, and shall cause each of its respective subsidiaries to, afford    
to the other party, and to the officers, employees, accountants, counsel,       
financial advisers and other representatives of such other party, reasonable    
access during normal business hours during the period prior to the Effective    
Time to all their respective properties, books, contracts, commitments,         
personnel and records and, during such period, each of the Company and Parent   
shall, and shall cause each of its respective subsidiaries to, furnish          
promptly to the other party, (a) a copy of each report, schedule, registration  
statement and other document filed by it during such period pursuant to the     
requirements of Federal or state securities laws and (b) all other information  
concerning its business, properties and personnel as such other party may       
reasonably request. Except as required by law, each of the Company and Parent   
will hold, and will cause its respective officers, employees, accountants,      
counsel, financial advisers and other representatives and affiliates to hold,   
any confidential information in accordance with the Confidentiality Agreement   
dated April 2, 1998, between Parent and the Company (the "Confidentiality       
Agreement").                                                                    

Section 5.3. Reasonable Efforts; Notification. (a) Upon the terms and       
subject to the conditions set forth in this Agreement, each of the parties      
agrees to use all reasonable efforts to take, or cause to be taken, all         
actions, and to do, or cause to be done, and to assist and cooperate with the   
other parties in doing, all things necessary, proper or advisable to            
consummate and make effective, in the most expeditious manner practicable, the  
Merger and the other transactions contemplated by this Agreement, including     
(i) the making of all necessary registrations and filings (including filings    
with Governmental Entities, if any), (ii) the obtaining of all necessary        
consents, approvals or waivers from third parties, and (iii) the execution and  
delivery of any additional instruments necessary to consummate the              
transactions contemplated by, and to fully carry out the purposes of, this      
Agreement. Each party shall promptly notify the other parties of any            
communication to that party from any Governmental Entity and permit the other   
parties to review in advance any proposed communications to any Governmental    
Entity. Parent and the Company shall not (and shall cause their respective      
affiliates and representatives not to) participate in any meeting with any      
Governmental Entity in respect of any filings, investigation or other inquiry   
unless it consults with the other party in advance and, to the extent           
permitted by such Governmental Entity, gives the other party the opportunity    
to attend and participate thereat. Subject to the Confidentiality Agreement,    
each of the parties hereto will coordinate and cooperate fully with the other   
parties hereto in exchanging such information and providing such assistance as  
such other parties may reasonably request in connection with the foregoing and  
in seeking early termination of any applicable waiting periods under the HSR    
Act or in connection with other required consents. Each of the Company and      
Parent agrees to respond promptly to and comply fully with any request for      
additional information or documents under the HSR Act. Subject to the           
Confidentiality Agreement, each party will provide the others with copies of    
all correspondence, filings or communications (or memoranda setting forth the   
substance thereof) between such party or any of its representatives, on the     
one hand, and any Governmental Entity or members of its staff, on the other     
hand, and any Governmental Entity or members of its staff, on the other hand,   
with respect to this Agreement and the                                          

A-22  

DEF 14A
89th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 89th
transactions contemplated hereby. Notwithstanding the foregoing, the Board of   
Directors of the Company shall not be prohibited from taking any action         
permitted by Section 4.2(b).                                                    

(b) The Company shall give prompt notice to Parent, and Parent shall give   
prompt notice to the Company, of (i) any representation or warranty made by it  
contained in this Agreement that is qualified as to materiality becoming        
untrue or inaccurate in any respect or any such representation or warranty      
that is not so qualified becoming untrue or inaccurate in any material respect  
or (ii) the failure by it to comply with or satisfy in any material respect     
any covenant, condition or agreement to be complied with or satisfied by it     
under this Agreement; provided, however, that no such notification shall        
affect the representations, warranties, covenants, or agreements of the         
parties or the conditions to the obligations of the parties under this          
Agreement.                                                                      

Section 5.4. Stock Option Plans. The Company and Parent shall take all      
necessary action to provide that, at the Effective Time, all outstanding stock  
options to purchase shares of Company Common Stock ("Stock Options")            
heretofore granted under any stock option or stock appreciation rights plan,    
program or arrangement of the Company (collectively, the "Stock Option Plans")  
will be canceled and retired and shall cease to exist, and that each holder of  
a Stock Option, whether or not then exercisable, shall receive with respect to  
such Stock Option, without any action on the part of such holder, the number    
of whole shares of Parent Common Stock equal to (i) the Fair Value of such      
Stock Option (as defined below) divided by (ii) the Closing Parent Stock Price  
(as defined below), where: the "Fair Value of such Stock Option" is equal to    
the product of (x) the number of shares of Company Common Stock subject to      
such Stock Option and (y) the excess, if any, of (A) the product of the         
Exchange Ratio and the Closing Parent Stock Price over (B) the exercise price   
of such Stock Option; and the "Closing Parent Stock Price" means the average    
of the daily last sale prices of Parent Common Stock as reported on the NYSE    
Composite Transactions reporting system (as reported in The Wall Street         
Journal or, if not reported therein, in another mutually agreed upon            
authoritative source) for the ten consecutive full trading days ending at the   
close of trading on the trading day immediately preceding the Closing Date.     
The Company shall use its reasonable best efforts to receive any consents       
necessary to effectuate the foregoing. The Company represents and warrants      
that, under the terms of the Stock Option Plans and the Stock Options,          
following the Effective Time, no holder of a Stock Option or participant in     
any Stock Option Plan shall have any right thereunder to acquire any capital    
stock of the Company, Parent or the Surviving Corporation.                      

Section 5.5. Benefit Plans and Employee Matters. (a) Parent agrees that the 
Company will honor, and, from and after the Effective Time, Parent will cause   
the Surviving Corporation to honor, in accordance with their respective terms   
as in effect on the date hereof, the employment, severance and bonus            
agreements and arrangements to which the Company is a party which are set       
forth on Sections 3.1(i) and 5.5 of the Company Disclosure Schedule. Parent     
intends to continue the Fluke Corporation Supplemental Retirement Plan, the     
Fluke Corporation Executive Deferred Compensation Plan and the Fluke            
Corporation Pre-Retirement Death Benefit Plan following the Effective Time,     
subject to their terms.                                                         

(b) Parent agrees that (i) for the period ending December 31, 1998, the     
Surviving Corporation shall continue the compensation and employee benefit and  
welfare plans and programs of the Company to the extent practicable as in       
effect on the date hereof, and (ii) thereafter the Surviving Corporation shall  
provide employees of the Company and its subsidiaries as a whole (A)            
compensation (including bonus and incentive awards) programs and plans and (B)  
employee benefit and welfare plans, programs, contracts, agreements and         
policies (including insurance and pension plans), fringe benefits and vacation  
policies which are substantially the same as or not materially less favorable   
in the aggregate to such employees than those generally in effect with respect  
to similarly situated employees of Parent.                                      

Section 5.6. Indemnification, Exculpation and Insurance. (a) The certificate
of incorporation and the by-laws of the Surviving Corporation shall contain     
the provisions with respect to indemnification and exculpation from liability   
set forth in the Company's certificate of incorporation and by-laws on the      
date of this Agreement, which provisions shall not be amended, repealed or      
otherwise modified for a period of six years from the Effective Time in any     
manner that would adversely affect the rights thereunder of individuals who on  
or prior to the Effective Time were directors, officers, employees or agents    
of the Company, unless such modification is                                     

A-23  

DEF 14A
90th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 90th
required by law. Parent shall guarantee the obligations of the Surviving        
Corporation with respect to the indemnification provisions contained in the     
Surviving Corporation's certificate of incorporation and by-laws.               

(b) For three years from the Effective Time, Parent shall maintain in effect
directors' and officers' liability insurance covering those persons who are     
currently covered by the Company's directors' and officers' liability           
insurance policy (a copy of which has been heretofore delivered to Parent)      
(the "Indemnified Parties") on terms no less favorable than the terms of such   
current insurance coverage; provided, however, that in no event shall Parent    
be required to expend in any one year an amount in excess of 200% of the        
annual premiums currently paid by the Company for such insurance; and provided  
further that if the annual premiums of such insurance coverage exceed such      
amount, Parent shall be obligated to obtain a policy with the greatest          
coverage available for a cost not exceeding such amount.                        

(c) In the event Parent, the Surviving Corporation or any of their          
successors or assigns (i) consolidates with or merges into any other person     
and shall not be the continuing or surviving corporation or entity of such      
consolidation or merger or (ii) transfers all or substantially all of its       
properties and assets to any person, then and in each such case, proper         
provisions shall be made so that the successors and assigns of Parent or the    
Surviving Corporation, as the case may be, shall assume the obligations set     
forth in this Section 5.6.                                                      

(d) This Section 5.6 shall survive the consummation of the Merger at the    
Effective Time, is intended to benefit the Company, Parent, the Surviving       
Corporation and the Indemnified Parties, and shall be binding on all            
successors and assigns of Parent and the Surviving Corporation.                 

Section 5.7. Letters of Accountants. (a) The Company shall use its          
reasonable efforts to cause to be delivered to Parent "comfort" letters of      
Ernst & Young LLP, the Company's independent public accountants, dated and      
delivered a date within two business days before the date on which the Form S-  
4 shall become effective and within two business days before the Closing Date,  
each addressed to Parent, in form and substance reasonably satisfactory to      
Parent and reasonably customary in scope and substance for letters delivered    
by independent public accountants in connection with transactions such as       
those contemplated by this Agreement.                                           

(b) Parent shall use its reasonable efforts to cause to be delivered to the 
Company "comfort" letters of Arthur Andersen LLP, Parent's independent public   
accountants, dated a date within two business days before the date on which     
the Form S-4 shall become effective and within two business days before the     
Closing Date, each addressed to the Company, in form and substance reasonably   
satisfactory to the Company and reasonably customary in scope and substance     
for letters delivered by independent public accountants in connection with      
transactions such as those contemplated by this Agreement.                      

Section 5.8. Fees and Expenses. (a) Except as provided in this Section 5.8, 
all fees and expenses incurred in connection with the Merger, this Agreement    
and the transactions contemplated hereby shall be paid by the party incurring   
such fees or expenses, whether or not the Merger is consummated.                

(b) The Company shall pay, or cause to be paid, in same day funds to Parent 
upon demand an amount equal to (A) $17,000,000 (the "Termination Fee") plus     
(B) Parent's aggregate Expenses (as hereinafter defined) not exceeding          
$3,000,000 (the "Expense Fee"):                                                 

(i) if the Agreement is terminated pursuant to (A) Section 7.1(b) as a  
result of a material breach by the Company of its agreements set forth in   
Section 4.2(b) or 5.1(b), (B) Section 7.1(g)(i) or 7.1(g)(ii); or (C)       
Section 7.1(h); or                                                          

(ii) if the Company enters into any agreement with respect to any       
Superior Proposal in accordance with Section 4.2(b); or                     

(iii) if (A) the Agreement is terminated pursuant to Section 7.1(g)(iii)
and (B) prior to such termination, any person or "group" acquiring          
beneficial ownership of more than 10% (excluding Fluke Capital and          
Management Company ("FCM") and ACM Asset Management, Inc. ("ICM")) of the   
outstanding shares of capital stock of the Company shall have refused or    
failed to deliver to Parent upon                                            

A-24  

DEF 14A
91st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 91st
request a binding commitment reasonably satisfactory in form and substance  
to Parent to the effect that such acquisition is purely for investment      
purposes and that such person or the members of such "group" shall not take 
any action that may frustrate the transactions contemplated by this         
Agreement and (C) within one year after the date of such termination of the 
Agreement, the Company consummates an Alternative Transaction; provided,    
that the Company shall make a nonrefundable payment of $5,000,000 (which    
amount shall be credited to Termination Fee or the Expense Fee) upon the    
termination of the Agreement pursuant to Section 7.1(g)(iii); or            

(iv) if (A) the Agreement is terminated pursuant to Section 7.1(f)      
following a failure to obtain the Company Stockholder Approval and (B) at   
the time of the Company Stockholders' Meeting there existed a Takeover      
Proposal or a third party shall have indicated its intention to make a      
Takeover Proposal or shall have solicited proxies or consents in opposition 
to the Merger and (C) within one year after the date of such termination of 
the Agreement, the Company consummates an Alternative Transaction.          

(c) Limitation of Termination Fees. Notwithstanding anything herein or in   
the Stock Option Agreement to the contrary, the sum of (x) the amounts payable  
to Parent pursuant to Section 5.8(b) and (y) the value of the Stock Option      
Agreement to the holder or holders thereof (which for purposes of this Section  
5.8(c) shall be the Option Repurchase Price (as defined in the Stock Option     
Agreement)) shall not exceed $20,000,000. If the sum of the amounts to which    
Parent would be entitled under Section 5.8(b) and the value of the Stock        
Option Agreement is greater than $20,000,000 in the aggregate on the date       
Parent would be entitled to demand payment of the Termination Fee, then the     
amount which the Company shall be obligated to pay Parent under Section 5.8(b)  
and the holder or holders (on a pro rata basis) of the Stock Option Agreement   
shall be limited to $20,000,000 and Parent shall indicate to the Company how    
such amount shall be allocated between the Termination Fee, the Expense Fee     
and the Option Repurchase Price.                                                

(d) The prevailing party in any legal action undertaken to enforce this     
Agreement or any provision hereof shall be entitled to recover from the other   
party the costs and expenses (including attorneys' and expert witness fees)     
incurred in connection with such action.                                        

Section 5.9. Public Announcements. Parent and Sub, on the one hand, and the 
Company, on the other hand, will consult with each other before issuing, and    
provide each other the opportunity to review and comment upon, any press        
release or other public statements with respect to the transactions             
contemplated by this Agreement, including the Merger, and shall not issue any   
such press release or make any such public statement prior to such              
consultation, except as may be required by applicable law, court process or by  
obligations pursuant to any listing agreement with any national securities      
exchange. The parties agree that the initial press release to be issued with    
respect to the transactions contemplated by this Agreement shall be in the      
form heretofore agreed to by the parties.                                       

Section 5.10. Affiliates; Accounting and Tax Treatment. (a) The Company     
shall (x) within 30 days after the date of this Agreement, deliver to Parent a  
letter identifying all persons who may be deemed affiliates of the Company      
under Rule 145 of the Securities Act or otherwise under applicable SEC          
accounting releases with respect to pooling-of-interests accounting treatment   
and (y) use its reasonable efforts to obtain from each such affiliate, by the   
thirtieth day prior to the Effective Time, a written agreement substantially    
in the form of Exhibit 5.10 hereto. The Company shall use its reasonable        
efforts to obtain such a written agreement as soon as practicable from any      
person who may be deemed to have become an affiliate of the Company, after the  
Company's delivery of the letter referred to above and prior to the Effective   
Time.                                                                           

(b) Each party hereto shall (i) use its reasonable efforts to cause the     
Merger to qualify, and shall not take any actions which such party knows or     
has reason to know could prevent the Merger from qualifying, for pooling-of-    
interests accounting treatment and as a reorganization under the provisions of  
Section 368(a) of the Code and (ii) use its reasonable efforts to obtain the    
letters from the accountants referred to in Sections 6.2(e) and 6.3(d) and the  
opinions of counsel referred to in Section 6.3(c).                              

A-25  

DEF 14A
92nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 92nd
(c) The Company shall (i) use its reasonable best efforts to secure the     
waiver of any limited stock appreciation rights or other rights to redeem for   
cash options or warrants of the Company by each holder thereof and (ii)         
subject to the prior consent of Parent, which shall not be unreasonably         
withheld, take such other actions as are necessary to cure any facts or         
circumstances that could prevent the Merger from qualifying for pooling-of-     
interests accounting treatment.                                                 

(d) Parent shall publish results covering at least 30 days of combined      
operations of the Company and Parent within 45 calendar days of the end of      
Parent's fiscal quarter ending immediately following the Effective Time that    
includes such 30 days of combined operations.                                   

Section 5.11. State Takeover Laws. The Company shall, upon the request of   
Parent, take all reasonable steps to assist in any challenge by Parent to the   
validity or applicability to the transactions contemplated by this Agreement,   
the Stock Option Agreement or the Stockholder Support Agreements, including     
the Merger, of any state takeover law.                                          

Section 5.12. Coordination of Dividends. Parent and the Company shall       
coordinate with one another regarding the declaration or payment of dividends   
in respect of Parent Common Stock and Company Common Stock (including any       
partial quarterly dividends) and the record dates and payment dates relating    
thereto, it being the intention of Parent and the Company that any holder of    
Company Common Stock shall not receive two dividends, or fail to receive one    
dividend, for any single calendar quarter with respect to its shares of         
Company Common Stock and/or any shares of Parent Common Stock any such holder   
receives in exchange therefor pursuant to the Merger.                           

ARTICLE VI  

Conditions Precedent  

Section 6.1. Conditions to Each Party's Obligations to Effect the           
Merger. The respective obligation of each party to effect the Merger is         
subject to the satisfaction or waiver on or prior to the Closing Date of the    
following conditions:                                                           

(a) Stockholder Approvals. The Company Stockholder Approval shall have  
been obtained.                                                              

(b) NYSE Listing. The shares of Parent Common Stock issuable to the     
Company's stockholders pursuant to this Agreement and under the Stock       
Option Plans shall have been approved for listing on the NYSE, subject to   
official notice of issuance.                                                

(c) No Injunctions; Litigation. No litigation brought by a Governmental 
Entity shall be pending, and no litigation shall be threatened by any       
Governmental Entity, which seeks to enjoin or prohibit the consummation of  
the Merger, and no temporary restraining order, preliminary or permanent    
injunction or other order issued by any court of competent jurisdiction or  
other legal restraint or prohibition preventing the consummation of the     
Merger shall be in effect.                                                  

(d) Form S-4. The Form S-4 shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness of the 
Form S-4 shall have been issued by the SEC, and no proceedings for that     
purpose shall have been initiated or, to the knowledge of Parent or the     
Company, threatened by the SEC.                                             

(e) HSR Act. The applicable waiting period (and any extension thereof)  
under the HSR Act shall have expired or been terminated.                    

(f) Approvals. Other than the filing of merger documents in accordance  
with the BCA, all authorizations, consents, waivers, orders or approvals    
required to be obtained, and all filings, notices or declarations required  
to be made, by Parent, Sub and the Company prior to the consummation of the 
Merger and the transactions contemplated hereunder shall have been obtained 
from, and made with, all required Governmental Entities except for such     
authorizations, consents, waivers, orders, approvals, filings, notices      

A-26  

DEF 14A
93rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 93rd
or declarations the failure to obtain or make which would not have a        
material adverse effect, at or after the Effective Time, on the Company or  
Parent.                                                                     

Section 6.2. Additional Conditions to Obligations of Parent and Sub. The    
obligations of Parent and Sub to effect the Merger are also subject to the      
following conditions:                                                           

(a) Representations and Warranties. Each of the representations and     
warranties of the Company contained in this Agreement shall, as of the      
Closing Date as though made on and as of the Closing Date, be true and      
correct except for such failures to be true and correct as could not,       
individually or in the aggregate, reasonably be expected to result in a     
material adverse effect on the Company or Parent (except that where any     
statement in a representation or warranty is expressly qualified by a       
material adverse effect, such statement shall be true and correct in all    
respects); provided that those representations and warranties which address 
matters only as of a particular date shall remain true and correct in all   
material respects (except that where any statement in a representation or   
warranty expressly includes a standard of materiality, such statement shall 
be true and correct in all respects giving effect to such standard) as of   
such date. Parent shall have received a certificate of the Chief Executive  
Officer and Chief Financial Officer of the Company to such effect.          

(b) Agreements and Covenants. The Company shall have performed or       
complied in all material respects with the agreements and covenants         
required by this Agreement to be performed or complied with by it on or     
prior to the Closing Date. Parent shall have received a certificate of the  
Chief Executive Officer and Chief Financial Officer of the Company to that  
effect.                                                                     

(c) Consents Under Agreements. The Company shall have obtained the      
consent or approval of each person whose consent or approval shall be       
required in connection with the Merger under all loan or credit agreements, 
notes, mortgages, indentures, leases or other agreements or instruments to  
which it or any of its Material Subsidiaries is a party, except those for   
which failure to obtain such consents and approvals would not have a        
material adverse effect on the Company prior to or after the Effective Time 
or a material adverse effect on Parent after the Effective Time.            

(d) Tax Opinion. Parent shall have received the opinion of Wachtell,    
Lipton, Rosen & Katz, counsel to Parent, dated the date of the Proxy        
Statement, to the effect that, on the basis of facts, representations and   
assumptions set forth in such opinion, the Merger will be treated for       
Federal income tax purposes as a reorganization qualifying under the        
provisions of Section 368(a) of the Code, which opinion shall not have been 
withdrawn or modified in any material respect. The issuance of such opinion 
shall be conditioned on the receipt of customary representation letters.    

(e) Pooling Letter. Parent shall have received from Arthur Andersen LLP,
as independent auditors of Parent, on the date of the Proxy Statement and   
on the Closing Date, letters, in each case dated as of such respective      
dates, addressed to Parent, in form and substance reasonably acceptable to  
Parent and to the effect that the business combination to be effected by    
the Merger is required to be accounted for as a pooling-of-interests by     
Parent for purposes of its consolidated financial statements under          
generally accepted accounting principles and applicable SEC rules and       
regulations. No action shall have been taken by any Governmental Entity or  
any statute, rule, regulation or order enacted, promulgated or issued by    
any Governmental Entity, or any proposal made for any such action by any    
Governmental Entity which is reasonably likely to be put into effect, that  
would prevent Parent from accounting for the business combination to be     
effected by the Merger as a pooling-of-interests. The conditions set forth  
in this Section 6.2(e) may not be waived by Parent without the Company's    
consent; provided that such consent shall not be withheld for any reason    
other than that such waiver would result in a material diminution in the    
value of the consideration to be received by holders of Company Common      
Stock in the Merger; and provided, further, that such consent shall not be  
required if the failure to satisfy the conditions set forth in this Section 
6.2(e) resulted from any act or omission of the Company.                    

 (f) Affiliate Agreements. Parent shall have received from each person who
may be deemed to be an affiliate of the Company (under Rule 145 of the      
Securities Act or otherwise under applicable SEC                            

A-27  

DEF 14A
94th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 94th
accounting releases with respect to pooling-of-interests accounting         
treatment) on or prior to the Closing Date a signed agreement substantially 
in the form of Exhibit 5.10 hereto.                                         

(g) Dissenting Shares. The number of Dissenting Shares shall not        
constitute more than 5% of the number of issued and outstanding shares of   
Company Common Stock.                                                       

Section 6.3. Additional Conditions to Obligations of the Company. The       
obligations of the Company to effect the Merger are also subject to the         
following conditions:                                                           

(a) Representations and Warranties. Each of the representations and     
warranties of Parent contained in this Agreement shall, as of the Closing   
Date as though made on and as of the Closing Date, be true and correct,     
except for such failures to be true and correct as could not, individually  
or in the aggregate, reasonably be expected to result in a material adverse 
effect on Parent (except that where any statement in a representation or    
warranty is expressly qualified by a material adverse effect, such          
statement shall be true and correct in all respects); provided that those   
representations and warranties which address matters only as of a           
particular date shall remain true and correct in all material respects      
(except that where any statement in a representation or warranty expressly  
includes a standard of materiality, such statement shall be true and        
correct in all respects giving effect to such standard) as of such date.    
The Company shall have received a certificate of the Chief Executive        
Officer and Chief Financial Officer of Parent to such effect.               

(b) Agreements and Covenants. Parent shall have performed or complied in
all material respects with the agreements and covenants required by this    
Agreement to be performed or complied with by it on or prior to the Closing 
Date. The Company shall have received a certificate the Chief Executive     
Officer and Chief Financial Officer of Parent to that effect.               

(c) Tax Opinion. The Company shall have received the opinion of Davis   
Wright Tremaine, counsel to the Company, dated the date of the Proxy        
Statement, to the effect that, on the basis of facts, representations and   
assumptions set forth in such opinion, the Merger will be treated for       
Federal income tax purposes as a reorganization qualifying under the        
provisions of Section 368(a) of the Code, which opinion shall not have been 
withdrawn or modified in any material respect. The issuance of such opinion 
shall be conditioned on the receipt of customary representation letters.    

ARTICLE VII 

Termination, Amendment and Waiver 

Section 7.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of matters presented    
in connection with the Merger by the stockholders of the Company:               

(a) by mutual written consent of Parent and the Company;                

 (b) by Parent, upon a breach of any representation, warranty, covenant or
agreement on the part of the Company set forth in this Agreement, or if any 
representation or warranty of the Company shall have become untrue, in      
either case such that the conditions set forth in Section 6.2(a) or Section 
6.2(b), as the case may be, would be incapable of being satisfied by        
October 31, 1998; provided that, in any case, a willful material breach     
which, to the extent it may be cured, is not cured within a reasonable time 
after notice thereof, shall be deemed to cause such conditions to be        
incapable of being satisfied for purposes of this Section 7.1(b);           

(c) by the Company, upon a breach of any representation, warranty,      
covenant or agreement on the part of Parent set forth in this Agreement, or 
if any representation or warranty of Parent shall have become untrue, in    
either case such that the conditions set forth in Section 6.3(a) or Section 
6.3(b), as the case may be, would be incapable of being satisfied by        
October 31, 1998; provided that, in any case, a willful material breach     
which, to the extent it may be cured, is not cured within a reasonable time 
after notice thereof, shall be deemed to cause such conditions to be        
incapable of being satisfied for purposes of this Section 7.1(c);           

A-28  

DEF 14A
95th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 95th
(d) by either Parent or the Company, if any Governmental Entity shall   
have issued an order, decree or ruling or taken any other action            
permanently enjoining, restraining or otherwise prohibiting the             
consummation of the Merger and such order, decree or ruling or other action 
shall have become final and nonappealable;                                  

(e) by either Parent or the Company, if the Merger shall not have       
occurred by October 31, 1998 unless the failure to consummate the Merger is 
the result of a breach of a covenant set forth in this Agreement or a       
material breach of any representation, or warranty, covenant or agreement   
set forth in this Agreement by the party seeking to terminate this          
Agreement;                                                                  

(f) by either Parent or the Company, if upon a vote at a duly held      
Company Stockholders' Meeting or any adjournment thereof the Company        
Stockholder Approval shall not have been obtained;                          

(g) by Parent, if (i) the Board of Directors of the Company shall       
withdraw, modify or change its recommendation of this Agreement or the      
Merger in any manner adverse to Parent, or the Company or any of its        
Material Subsidiaries shall have entered into an agreement with respect to  
any Alternative Transaction, or the Board of Directors of the Company shall 
have resolved or announced its intention to do any of the foregoing; (ii)   
the Board of Directors of the Company shall have recommended to the         
shareholders of the Company a Takeover Proposal, or shall have resolved or  
announced its intention to do so; or (iii) any person (other than Parent    
and its subsidiaries) shall have acquired beneficial ownership of, or any   
"group" (as such term is defined under Section 13(d) of the Exchange Act    
and the rules and regulations promulgated thereunder) shall have been       
formed which beneficially owns, or has the right to acquire beneficial      
ownership of, more than 10% of the then outstanding shares of capital stock 
of the Company; provided that existing interests of FCM and ICM shall not   
give rise to any termination right hereunder;                               

(h) by the Company, in accordance with the provisions of Section 4.2(b);
and                                                                         

(i) by the Company, if its Board of Directors so determines by a vote of
a majority of the members of its entire Board, at any time during the two-  
day period commencing at the close of business on the fifth calendar day    
(the "Determination Date") prior to the date scheduled for the Company      
Stockholders' Meeting, if the average of the daily last sale prices of      
Parent Common Stock as reported on the NYSE Composite Transactions          
reporting system (as reported in The Wall Street Journal or, if not         
reported therein, in another mutually agreed upon authoritative source) for 
the fifteen consecutive full trading days ending at the close of trading on 
the Determination Date (the "Average Closing Price") shall be less than     
$63.88; subject, however, to the following four sentences. If the Company   
elects to exercise its termination right pursuant to this Section 7.1(i),   
it shall give prompt written notice to Parent; provided that such notice of 
election to terminate may be withdrawn at any time within the               
aforementioned two-day period or during the two-day period specified below. 
During the two-day period commencing with its receipt of such notice,       
Parent may elect to increase the Exchange Ratio to equal a number equal to  
a quotient (rounded to five decimal points), the numerator of which is the  
product of $63.88 and the Exchange Ratio (as then in effect) and the        
denominator of which is the Average Closing Price. If Parent makes an       
election contemplated by the preceding sentence within such two-day period, 
it shall give prompt written notice to the Company of such election and the 
revised Exchange Ratio, whereupon no termination shall have occurred        
pursuant to this Section 7.1(i) and this Agreement shall remain in effect   
in accordance with its terms, except that any references in this Agreement  
to "Exchange Ratio" shall thereafter be deemed to refer to the Exchange     
Ratio as adjusted pursuant to this Section 7.1(i). If Parent declares or    
effects a stock dividend, reclassification, recapitalization, split-up,     
combination, exchange of shares or similar transaction between the date     
hereof and the Determination Date, the prices for the Parent Common Stock   
shall be appropriately adjusted for the purposes of applying this Section   
7.1(i).                                                                     

Section 7.2. Effect of Termination. In the event of termination of this     
Agreement by either the Company or Parent as provided in Section 7.1, this      
Agreement shall forthwith become void and have no effect, without any           
liability or obligation on the part of Parent, Sub or the Company, other than   
the provisions of Section 3.1(s), 3.2(j), the last sentence of Section 5.2,     
Section 5.8, this Section 7.2 and Article VIII and except to the                

A-29  

DEF 14A
96th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 96th
extent that such termination results from the willful and material breach by a  
party of any of its representations, warranties, covenants or agreements set    
forth in this Agreement.                                                        

Section 7.3. Amendment. This Agreement may be amended by the parties at any 
time before or after the Company Stockholder Approval; provided, however, that  
after the Company Stockholder Approval there shall not be made any amendment    
that by law requires further approval by the stockholders of the Company        
without the further approval of such stockholders. This Agreement may not be    
amended except by an instrument in writing signed on behalf of each of the      
parties.                                                                        

Section 7.4. Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations   
or other acts of the other parties, (b) waive any inaccuracies in the           
representations and warranties contained in this Agreement or in any document   
delivered pursuant to this Agreement or (c) subject to the proviso of Section   
7.3, waive compliance with any of the agreements or conditions contained in     
this Agreement. Any agreement on the part of a party to any such extension or   
waiver shall be valid only if set forth in an instrument in writing, signed on  
behalf of such party. The failure of any party to this Agreement to assert any  
of its rights under this Agreement or otherwise shall not constitute a waiver   
of those rights.                                                                

Section 7.5. Procedure for Termination, Amendment, Extension or Waiver. A   
termination of this Agreement pursuant to Section 7.1, an amendment of this     
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to         
Section 7.4 shall, in order to be effective, require in the case of Parent,     
Sub or the Company, action by its Board of Directors or the duly authorized     
designee of its Board of Directors.                                             

ARTICLE VIII  

General Provisions  

Section 8.1. Nonsurvival of Representations and Warranties. None of the     
representations and warranties in this Agreement or in any instrument           
delivered pursuant to this Agreement shall survive the Effective Time. This     
Section 8.1 shall not limit any covenant or agreement of the parties which by   
its terms contemplates performance after the Effective Time of the Merger.      

Section 8.2. Notices. All notices, requests, claims, demands and other      
communications under this Agreement shall be in writing and shall be deemed     
given if delivered personally or sent by overnight courier (providing proof of  
delivery) or telecopy (with receipt acknowledged) to the parties at the         
following addresses (or at such other address for a party as shall be           
specified by like notice):                                                      

(a) if to Parent or Sub, to                                                 

Danaher Corporation                                                     
1250 24th Street, N.W.                                                  
Washington, D.C. 20037                                                  
Facsimile: (202) 828-0860                                               

Attention: Patrick W. Allender                                          

with a copy to:                                                         

Wachtell, Lipton, Rosen & Katz                                          
51 West 52nd Street                                                     
New York, NY 10019                                                      
Facsimile: (212) 403-2000                                               

Attention: Martin Lipton, Esq.                                          

A-30  

DEF 14A
97th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 97th
and a copy to:                                                          

Wilmer, Cutler & Pickering                                              
2445 M Street, N.W.                                                     
Washington, DC 20037                                                    
Facsimile: (202) 663-6363                                               
Attention: George P. Stamas, Esq.                                       

(b) if to the Company, to                                                   

Fluke Corporation                                                       
6920 Seaway Boulevard                                                   
Everett, WA 98023                                                       
Facsimile: (425) 356-5256                                               
Attention: Douglas McKnight                                             

with a copy to:                                                         

Davis Wright Tremaine                                                   
2600 Century Square                                                     
1501 4th Avenue                                                         
Seattle, WA 98101                                                       
Facsimile: (206) 628-7699                                               
Attention: Francis Kareken, Esq.                                        

Section 8.3. Definitions. For purposes of this Agreement:                   

(a) an "affiliate" of any person means another person that directly or  
indirectly, through one or more intermediaries, controls, is controlled by, 
or is under common control with, such first person;                         

(b) "material adverse change" or "material adverse effect" means, when  
used in connection with the Company or Parent, any changes or effects that  
is or would, individually or in the aggregate, reasonably be expected to be 
materially adverse to the business, assets, liabilities, condition          
(financial or otherwise) or results of operations of such party and its     
subsidiaries taken as a whole;                                              

(c) "person" means an individual, corporation, partnership, joint       
venture, association, trust, unincorporated organization or other entity;   
and                                                                         

(d) a "subsidiary" of any person means another person, an amount of the 
voting securities, other voting ownership or voting partnership interests   
of which is sufficient to elect at least a majority of its Board of         
Directors or other governing body (or, if there are no such voting          
interests, more than 50% of the equity interests of which) is owned         
directly or indirectly by such first person.                                

(e) Parent's "Expenses" shall mean all documented out-of-pocket fees and
expenses incurred or paid by or on behalf of Parent in connection with or   
in contemplation of the Merger or the consummation of any of the            
transactions contemplated by this Agreement, including all fees and         
expenses of counsel, investment banking firms, accountants, experts and     
consultants to Parent.                                                      

Section 8.4. Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of, or an    
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table    
of contents and headings contained in this Agreement are for reference          
purposes only and shall not affect in any way the meaning or interpretation of  
this Agreement. Whenever the words "include," "includes" and "including" are    
used in this Agreement, they shall be deemed to be followed by the words        
"without limitation."                                                           

Section 8.5. Counterparts. This Agreement may be executed in one or more    
counterparts, all of which shall be considered one and the same agreement and   
shall become effective when one or more counterparts have been signed by each   
of the parties and delivered to the other parties.                              

A-31  

DEF 14A
98th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 98th
Section 8.6. Entire Agreement; No Third-Party Beneficiaries. This Agreement 
and the Confidentiality Agreement constitute the entire agreement, and          
supersede all prior agreements and understandings, both written and oral,       
among the parties with respect to the subject matter of this Agreement and,     
except for the provisions of Article II and Section 5.6, are not intended to    
confer upon any person other than the parties hereto any rights or remedies     
hereunder.                                                                      

Section 8.7. Governing Law. Except for Article I which shall be governed and
construed in accordance with the laws of the State of Washington, this          
Agreement shall be governed by, and construed in accordance with, the laws of   
the State of Delaware, regardless of the laws that might otherwise govern       
under applicable principles of conflict of laws thereof.                        

Section 8.8. Assignment. Neither this Agreement nor any of the rights,      
interests or obligations under this Agreement shall be assigned, in whole or    
in part, by operation of law or otherwise by any of the parties 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.        

Section 8.9. Enforcement. The parties agree that irreparable damage would   
occur in the event that any of the provisions of this Agreement were not        
performed in accordance with their specific terms or were otherwise breached.   
It is accordingly agreed that the parties shall be entitled to an injunction    
or injunctions to prevent breaches of this Agreement and to enforce             
specifically the terms and provisions of this Agreement in any court of the     
United States located in the State of Delaware or in Delaware state court,      
this being in addition to any other remedy to which they are entitled at law    
or in equity. In addition, each of the parties hereto (a) consents to submit    
itself to the personal jurisdiction of any Federal court located in the State   
of Delaware or any Delaware state court in the event any dispute arises out of  
this Agreement or any of the transactions contemplated by this Agreement, (b)   
agrees that it will not attempt to deny or defeat such personal jurisdiction    
by motion or other request for leave from any such court, and (c) agrees that   
it will not bring any action relating to this Agreement or any of the           
transactions contemplated by this Agreement in any court other than a Federal   
or state court sitting in the State of Delaware.                                

IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement  
to be signed by their respective officers thereunto duly authorized, all as of  
the date first written above.                                                   

Attest:                                   Danaher Corporation                   

                               By: /S/ Patrick W. Allender
                             Name: Patrick W. Allender
                                    Title: Senior Vice President and
                                   Chief Financial Officer
                            Falcon Acquisition Corp.

                               By: /S/ Patrick W. Allender
                             Name: Patrick W. Allender
                    Title: President

                     Fluke Corporation

                                    By: /S/ William G. Parzybok, Jr.
                                  Name: William G. Parzybok, Jr.
                                    Title: Chairman of the Board and
                                   Chief Executive Officer

A-32  

DEF 14A
99th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 99th
                                                                  EXHIBIT 5.10

FORM OF AFFILIATE LETTER  

Danaher Corporation                                                             
1250 24th Street, N.W.                                                          
Washington, D.C. 20037                                                          

Ladies and Gentlemen:                                                           

I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of FLUKE CORPORATION, a Washington corporation (the "Company"),  
as the term "affiliate" is (i) defined within the meaning of Rule 145 of the    
rules and regulations (the "Rules and Regulations") of the Securities and       
Exchange Commission (the "Commission") under the Securities Act of 1933, as     
amended (the "Act"), and/or (ii) used in and for purposes of Accounting Series  
Releases 130 and 135, as amended, of the Commission. Pursuant to the terms of   
the Agreement and Plan of Merger dated as of April 2, 1998 (the "Agreement"),   
among Danaher Corporation, a Delaware corporation ("Parent"), Falcon            
Acquisition Corp., a Washington corporation ("Sub"), and the Company, Sub will  
be merged with and into the Company (the "Merger").                             

In connection with the Merger, I am entitled to receive shares of common    
stock, par value $.01 per share, of Parent (the "Parent Shares") in exchange    
for shares (or options for shares) owned by me of common stock of the Company   
(the "Company Shares").                                                         

I represent, warrant and covenant to Parent that in the event I receive any 
Parent Shares as a result of the Merger:                                        

(a) I shall not make any sale, transfer or other disposition of the     
Parent Shares in violation of the Act or the Rules and Regulations.         

 (b) I have carefully read this letter and the Agreement and discussed the
requirements of such documents and other applicable limitations upon my     
ability to sell, transfer or otherwise dispose of Parent Shares, to the     
extent I felt necessary, with my counsel or counsel for the Company.        

 (c) I have been advised that the issuance of Parent Shares to me pursuant
to the Merger has been registered with the Commission under the Act on a    
Registration Statement on Form S-4. However, because I have been advised    
that, at the time the Merger is submitted for a vote of the stockholders of 
the Company, (a) I may be deemed to be an affiliate of the Company, and (b) 
other than as set forth in the Agreement, the distribution by me of the     
Parent Shares has not been registered under the Act, I will not sell,       
transfer, hedge, encumber or otherwise dispose of Parent Shares issued to   
me in the Merger unless (i) such sale, transfer or other disposition is     
made in conformity with the volume and other limitations of Rule 145        
promulgated by the Commission under the Act, (ii) such sale, transfer or    
other disposition has been made pursuant to an effective registration       
statement under the Act, or (iii) in the opinion of counsel reasonably      
acceptable to Parent or as described in a "no-action" or interpretive       
letter from the Staff of the Commission, such sale, transfer or other       
disposition is otherwise exempt from registration under the Act.            

(d) I understand that Parent is under no obligation, other than as set  
forth in the Agreement, to register the sale, transfer or other disposition 
of the Parent Shares by me or on my behalf under the Act or to take any     
other action necessary in order to make compliance with an exemption from   
such registration available solely as a result of the Merger.               

(e) I also understand that there will be placed on the Certificates for 
the Parent Shares issued to me, or any substitutions therefor, a legend     
stating in substance:                                                       

THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION 
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE 
SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN           
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE                       

DEF 14A
100th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 100th
REGISTERED HOLDER HEREOF AND DANAHER CORPORATION, A COPY OF WHICH AGREEMENT 
IS ON FILE AT THE PRINCIPAL OFFICES OF DANAHER CORPORATION.                 

(f) I also understand that unless a sale or transfer is made in         
conformity with the provisions of Rule 145, or pursuant to a registration   
statement, Parent reserves the right to put the following legend on the     
certificates issued to my transferee:                                       

 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED     
SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE        
SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER 
NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION      
THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE     
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN         
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933. 

It is understood and agreed that the legends set forth in paragraphs (e) and
(f) above shall be removed by delivery of substitute certificates without such  
legend if the undersigned shall have delivered to Parent a copy of a letter     
from the staff of the Commission, or an opinion of counsel reasonably           
satisfactory to Parent in form and substance reasonably satisfactory to         
Parent, to the effect that such legend is not required for purposes of the      
Act.                                                                            

I further represent to, and covenant with, Parent that I will not, during   
the 30 days prior to the Effective Time (as defined in the Agreement), sell,    
transfer, hedge, encumber or otherwise dispose or reduce my rights with         
respect to of the Company Shares or shares of the capital stock of Parent that  
I may hold and, furthermore, that I will not sell, transfer, hedge, encumber    
or otherwise dispose of or reduce my rights with respect to Parent Shares       
received by me in the Merger or any other shares of the capital stock of        
Parent until after such time as results covering at least 30 days of combined   
operations of the Company and Parent have been published by Parent, in the      
form of a quarterly earnings report, an effective registration statement filed  
with the Commission, a report to the Commission on Form 10-K, 10-Q, or 8-K, or  
any other public filing or announcement which includes such combined results    
of operations.                                                                  

Execution of this letter should not be considered an admission on my part   
that I am an "affiliate" of the Company as described in the first paragraph of  
this letter, or as a waiver of any rights I may have to object to any claim     
that I am such an affiliate on or after the date of this letter.                

                     Very truly yours,

                                         _____________________________________
         Name:

Accepted this    day of       1998, by                                          

DANAHER CORPORATION                                                             

By __________________________________                                           
Name:                                                                         
Title:                                                                        

A-2 

DEF 14A
101st Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 101st
                                                                       ANNEX B
[LETTERHEAD OF SALOMON SMITH BARNEY]                                            

April 24, 1998  

Board of Directors                                                              
Fluke Corporation                                                               
6920 Seaway Boulevard                                                           
Everett, Washington 98023                                                       

Ladies and Gentlemen:                                                           

You have requested our opinion as investment bankers as to the fairness,    
from a financial point of view, to the holders of shares (the "Shares") of      
common stock, par value $.25 per share (the "Company Common Stock"), of Fluke   
Corporation (the "Company") of the consideration to be received by such         
holders in the proposed acquisition of the Company by Danaher Corporation       
("Danaher"), pursuant to an Agreement and Plan of Merger dated April 24, 1998   
(the "Agreement"), among the Company, Danaher, and Falcon Acquisition Corp.     
("Merger Sub").                                                                 

As more specifically set forth in the Agreement, and subject to the terms   
and conditions thereof, Merger Sub will merge (the "Proposed Merger") with and  
into the Company, and each issued and outstanding Share (other than Shares      
owned by Danaher, Merger Sub or the Company and shareholders who properly       
dissent from the Proposed Merger) will be converted in the Proposed Merger      
into the right to receive .45239 of a share of common stock, par value $.01     
per share (the "Danaher Common Stock"), of Danaher, subject to adjustment to    
the right to receive .90478 of a share of Danaher Common Stock in the event     
that the previously announced two-for-one stock split proposed by Danaher is    
approved by the shareholders of Danaher.                                        

As you are aware, Salomon Brothers Inc, doing business as Salomon Smith     
Barney (collectively with all other entities doing business as Salomon Smith    
Barney, "Salomon Smith Barney"), is acting as financial advisor to the Company  
in connection with the Proposed Merger and will receive a fee for such          
services, a substantial portion of which is contingent upon consummation of     
the Proposed Merger. Additionally, Salomon Smith Barney or its affiliates have  
previously rendered certain investment banking and financial advisory services  
to the Company and Danaher, for which we received customary compensation. In    
addition, in the ordinary course of business, Salomon Smith Barney may          
actively trade the securities of the Company and Danaher for its own account    
and for the accounts of customers and, accordingly, may at any time hold a      
long or short position in such securities. Salomon Smith Barney and its         
affiliates (including Travelers Group Inc.) may have other business             
relationships with Danaher and the Company.                                     

In connection with rendering our opinion, we have reviewed and analyzed,    
among other things, the following: (i) the Agreement; (ii) certain publicly     
available information concerning the Company, including the Annual Reports on   
Form 10-K of the Company for each of the years in the three-year period ended   
April 25, 1997; (iii) certain internal information, primarily financial in      
nature, including projections, concerning the business and operations of the    
Company, prepared by the Company's management and finished to us by the         
Company for purposes of our analysis; (iv) certain publicly available           
information concerning the trading of, and the trading market for, the Company  
Common Stock; (v) certain publicly available information concerning Danaher,    
including the Annual Reports on Form 10-K of Danaher for each of the years in   
the three-year period                                                           

B-1 

DEF 14A
102nd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 102nd
ended December 31, 1997; (vi) certain other information, primarily financial    
in nature, including projections, concerning the business and operations of     
Danaher, prepared by Danaher's management and furnished to us by Danaher for    
purposes of our analysis; (vii) certain publicly available information          
concerning the trading of, and the trading market for, the Danaher Common       
Stock; (viii) certain publicly available information with respect to certain    
other companies that we believe to be comparable to the Company or Danaher and  
the trading markets for certain of such other companies' securities; and (ix)   
certain publicly available information concerning the nature and terms of       
certain other transactions that we consider relevant to our inquiry. We also    
have considered such other information, financial studies, analyses,            
investigations and financial, economic and market criteria that we deemed       
relevant. We also have met with certain officers and employees of the Company   
and Danaher to discuss the foregoing as well as other matters we believe        
relevant to our inquiry.                                                        

In our review and analysis and in arriving at our opinion, we have assumed  
and relied upon the accuracy and completeness of all of the financial and       
other information provided to us or publicly available and have neither         
attempted independently to verify nor assumed any responsibility for verifying  
any of such information. With respect to financial projections and forecasts,   
we have been advised by the management of the Company and Danaher and have      
assumed that they were reasonably prepared and reflect the best currently       
available estimates and judgment of the Company's or Danaher's management, as   
the case may be, as to the future financial performance of the Company or       
Danaher, as the case may be, as we express no view with respect to such         
projections or forecasts or the assumptions on which they were based. We also   
have assumed the Proposed Merger will be consummated in a timely manner and in  
accordance with the terms of the Agreement. We have not conducted a physical    
inspection of any of the properties or facilities of the Company or Danaher,    
nor have we made or obtained or assumed any responsibility for making or        
obtaining any independent evaluations or appraisals of any of such properties   
or facilities, nor have we been furnished with any such evaluations or          
appraisals.                                                                     

In conducting our analysis and arriving at our opinion as expressed herein, 
we have considered such financial and other factors as we have deemed           
appropriate under the circumstances including, among others, the following:     
(i) the historical and current financial position and results of operations of  
the Company and Danaher; (ii) the business prospects of the Company and         
Danaher; (iii) the historical and current market for the Company Common Stock,  
the Danaher Common Stock and for the equity securities of certain other         
companies that we believe to be comparable to the Company or Danaher; and (iv)  
the nature and terms of certain other acquisition transactions that we believe  
to be relevant. We have also taken into account our assessment of general       
economic, market and financial conditions as well as our experience in          
connection with similar transactions and securities valuation generally. Our    
opinion necessarily is based upon conditions as they exist and can be           
evaluated on the date hereof and we assume no responsibility to update or       
revise our opinion based upon circumstances or events occurring after the date  
hereof. Our opinion is, in any event, limited to the fairness, from a           
financial point of view, of the consideration to be received by the holders of  
Shares in the Proposed Merger and does not address the Company's underlying     
business decision to effect the Proposed Merger or constitute a recommendation  
to any holder of Shares as to how such holder should vote with respect to the   
Proposed Merger. Nor does our opinion constitute an opinion or imply any        
conclusion as to the price at which Danaher Common Stock will trade upon the    
public announcement or the consummation of the Proposed Merger.                 

This opinion is intended solely for the benefit and use of the Company      
(including its management and directors) in considering the transaction to      
which it relates and may not be used for any other purpose or reproduced,       
disseminated, quoted or referred to at any time, in any manner or for any       
purpose without the prior written consent of Salomon Smith Barney, except that  
this opinion may be reproduced in full in, and references to the opinion and    
to Salomon Smith Barney and its relationship with the Company (in each case in  
such form as Salomon Smith Barney shall approve) may be included in, the proxy  
statement the Company distributes to holders of Company Common Stock in         
connection with the Proposed Merger.                                            

B-2 

DEF 14A
103rd Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 103rd
Based upon and subject to the foregoing, it is our opinion as investment    
bankers that as of the date hereof, the consideration to be received by the     
holders of Shares in the Proposed Merger is fair, from a financial point of     
view, to such holders.                                                          
                     Very truly yours,

                            /s/ Salomon Smith Barney

                        Salomon Smith Barney

B-3 

DEF 14A
104th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 104th
                                                                       ANNEX C

CHAPTER 23B.13  

DISSENTERS' RIGHTS  

23B.13.010 DEFINITIONS.--As used in this chapter:                           

(1) "Corporation" means the issuer of the shares held by a dissenter    
before the corporate action, or the surviving or acquiring corporation by   
merger or share exchange of that issuer.                                    

(2) "Dissenter" means a shareholder who is entitled to dissent from     
corporate action under RCW 23B.13.020 and who exercises that right when and 
in the manner required by RCW 23B.13.200 through 23B.13.280.                

(3) "Fair value," with respect to a dissenter's shares, means the value 
of the shares immediately before the effective date of the corporate action 
to which the dissenter objects, excluding any appreciation or depreciation  
in anticipation of the corporate action unless exclusion would be           
inequitable.                                                                

(4) "Interest" means interest from the effective date of the corporate  
action until the date of payment, at the average rate currently paid by the 
corporation on its principal bank loans or, if none, at a rate that is fair 
and equitable under all the circumstances.                                  

(5) "Record shareholder" means the person in whose name shares are      
registered in the records of a corporation or the beneficial owner of       
shares to the extent of the rights granted by a nominee certificate on file 
with a corporation.                                                         

(6) "Beneficial shareholder" means the person who is a beneficial owner 
of shares held in a voting trust or by a nominee as the record shareholder. 

(7) "Shareholder" means the record shareholder or the beneficial        
shareholder.                                                                

23B.13.020 RIGHT TO DISSENT.--(1) A shareholder is entitled to dissent from,
and obtain payment of the fair value of the shareholder's shares in the event   
of, any of the following corporate actions:                                     

(a) Consummation of a plan of merger to which the corporation is a party
(i) if shareholder approval is required for the merger by RCW 23B.11.030,   
23B.11.080, or the articles of incorporation and the shareholder is         
entitled to vote on the merger, or (ii) if the corporation is a subsidiary  
that is merged with its parent under RCW 23B.11.040;                        

(b) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the            
shareholder is entitled to vote on the plan;                                

(c) Consummation of a sale or exchange of all, or substantially all, of 
the property of the corporation other than in the usual and regular course  
of business, if the shareholder is entitled to vote on the sale or          
exchange, including a sale in dissolution, but not including a sale         
pursuant to court order or a sale for cash pursuant to a plan by which all  
or substantially all of the net proceeds of the sale will be distributed to 
the shareholders within one year after the date of sale;                    

 (d) An amendment of the articles of incorporation that materially reduces
the number of shares owned by the shareholder to a fraction of a share if   
the fractional share so created is to be acquired for cash under RCW        
23B.06.040; or                                                              

(e) Any corporate action taken pursuant to a shareholder vote to the    
extent the articles of incorporation, bylaws, or a resolution of the board  
of directors provides that voting or nonvoting shareholders are entitled to 
dissent and obtain payment for their shares.                                

(2) A shareholder entitled to dissent and obtain payment for the            
shareholder's shares under this chapter may not challenge the corporate action  
creating the shareholder's entitlement unless the action fails to comply with   
the procedural requirements imposed by this title, RCW 25.10.900 through        
25.10.955, the articles of incorporation, or the bylaws, or is fraudulent with  
respect to the shareholder or the corporation.                                  

C-1 

DEF 14A
105th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 105th
(3) The right of a dissenting shareholder to obtain payment of the fair     
value of the shareholder's shares shall terminate upon the occurrence of any    
one of the following events:                                                    

(a) The proposed corporate action is abandoned or rescinded;            

(b) A court having jurisdiction permanently enjoins or sets aside the   
corporate action; or                                                        

(c) The shareholder's demand for payment is withdrawn with the written  
consent of the corporation.                                                 

23B.13.030 DISSENT OF NOMINEES AND BENEFICIAL OWNERS.--(1) A record         
shareholder may assert dissenters' rights as to fewer than all the shares       
registered in the shareholder's name only if the shareholder dissents with      
respect to all shares beneficially owned by any one person and notifies the     
corporation in writing of the name and address of each person on whose behalf   
the shareholder asserts dissenters' rights. The rights of a partial dissenter   
under this subsection are determined as if the shares as to which the           
dissenter dissents and the dissenter's other shares were registered in the      
names of different shareholders.                                                

(2) A beneficial shareholder may assert dissenters' rights as to shares held
on the beneficial shareholder's behalf only if:                                 

(a) The beneficial shareholder submits to the corporation the record    
shareholder's written consent to the dissent no later than the time the     
beneficial shareholder asserts dissenters' rights; and                      

(b) The beneficial shareholder does so with respect to all shares of    
which such shareholder is the beneficial shareholder or over which such     
shareholder has power to direct the vote.                                   

23B.13.200 NOTICE OF DISSENTERS' RIGHTS.--(1) If proposed corporate action  
creating dissenters' rights under RCW 23B.13.020 is submitted to a vote at a    
shareholders' meeting, the meeting notice must state that shareholders are or   
may be entitled to assert dissenters' rights under this chapter and be          
accompanied by a copy of this chapter.                                          

(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is 
taken without a vote of shareholders, the corporation, within ten days after    
the effective date of such corporate action, shall notify in writing all        
shareholders entitled to assert dissenters' rights that the action was taken    
and send them the dissenters' notice described in RCW 23B.13.220.               

23B.13.210 NOTICE OF INTENT TO DEMAND PAYMENT.--(1) If proposed corporate   
action creating dissenters' rights under RCW 23B.13.020 is submitted to a vote  
at a shareholders' meeting, a shareholder who wishes to assert dissenters'      
rights must (a) deliver to the corporation before the vote is taken written     
notice of the shareholder's intent to demand payment for the shareholder's      
shares if the proposed action is effected, and (b) not vote such shares in      
favor of the proposed action.                                                   

(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section is not entitled to payment for the shareholder's shares under      
this chapter.                                                                   

23B.13.220 DISSENTERS' NOTICE.--(1) If proposed corporate action creating   
dissenters' rights under RCW 23B.13.020 is authorized at a shareholders'        
meeting, the corporation shall deliver a written dissenters' notice to all      
shareholders who satisfied the requirements of RCW 23B.13.210.                  

(2) The dissenters' notice must be sent within ten days after the effective 
date of the corporate action, and must:                                         

(a) State where the payment demand must be sent and where and when      
certificates for certificated shares must be deposited;                     

(b) Inform holders of uncertificated shares to what extent transfer of  
the shares will be restricted after the payment demand is received;         

C-2 

DEF 14A
106th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 106th
(c) Supply a form for demanding payment that includes the date of the   
first announcement to news media or to shareholders of the terms of the     
proposed corporate action and requires that the person asserting            
dissenters' rights certify whether or not the person acquired beneficial    
ownership of the shares before that date;                                   

(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty nor more than sixty days after the  
date the notice in subsection (1) of this section is delivered; and         

(e) Be accompanied by a copy of this chapter.                           

23B.13.230 DUTY TO DEMAND PAYMENT.--(1) A shareholder sent a dissenters'    
notice described in RCW 23B.13.220 must demand payment, certify whether the     
shareholder acquired beneficial ownership of the shares before the date         
required to be set forth in the dissenters' notice pursuant to RCW              
23B.13.220(2)(c), and deposit the shareholder's certificates in accordance      
with the terms of the notice.                                                   

(2) The shareholder who demands payment and deposits the shareholder's share
certificates under subsection (1) of this section retains all other rights of   
a shareholder until the proposed corporate action is effected.                  

(3) A shareholder who does not demand payment or deposit the shareholder's  
share certificates where required, each by the date set in the dissenters'      
notice, is not entitled to payment for the shareholder's shares under this      
chapter.                                                                        

23B.13.240 SHARE RESTRICTIONS.--(1) The corporation may restrict the        
transfer of uncertificated shares from the date the demand for their payment    
is received until the proposed corporate action is effected or the restriction  
is released under RCW 23B.13.260.                                               

(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until the effective date of    
the proposed corporate action.                                                  

23B.13.250 PAYMENT.--(1) Except as provided in RCW 23B.13.270, within thirty
days of the later of the effective date of the proposed corporate action, or    
the date the payment demand is received, the corporation shall pay each         
dissenter who complied with RCW 23B.13.230 the amount the corporation           
estimates to be the fair value of the shareholder's shares, plus accrued        
interest.                                                                       

(2) The payment must be accompanied by:                                     

 (a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen months before the date of payment, an income          
statement for that year, a statement of changes in shareholders' equity for 
that year, and the latest available interim financial statements, if any;   

 (b) An explanation of how the corporation estimated the fair value of the
shares;                                                                     

(c) An explanation of how the interest was calculated;                  

(d) A statement of the dissenter's right to demand payment under RCW    
23B.13.280; and                                                             

(e) A copy of this chapter.                                             

23B.13.260 FAILURE TO TAKE ACTION.--(1) If the corporation does not effect  
the proposed action within sixty days after the date set for demanding payment  
and depositing share certificates, the corporation shall return the deposited   
certificates and release any transfer restrictions imposed on uncertificated    
shares.                                                                         

(2) If after returning deposited certificates and releasing transfer        
restrictions, the corporation wishes to undertake the proposed action, it must  
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment       
demand procedure.                                                               

C-3 

DEF 14A
107th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 107th
23B.13.270 AFTER-ACQUIRED SHARES.--(1) A corporation may elect to withhold  
payment required by RCW 23B.13.250 from a dissenter unless the dissenter was    
the beneficial owner of the shares before the date set forth in the             
dissenters' notice as the date of the first announcement to news media or to    
shareholders of the terms of the proposed corporate action.                     

(2) To the extent the corporation elects to withhold payment under          
subsection (1) of this section, after taking the proposed corporate action, it  
shall estimate the fair value of the shares, plus accrued interest, and shall   
pay this amount to each dissenter who agrees to accept it in full satisfaction  
of the dissenter's demand. The corporation shall send with its offer an         
explanation of how it estimated the fair value of the shares, an explanation    
of how the interest was calculated, and a statement of the dissenter's right    
to demand payment under RCW 23B.13.280.                                         

23B.13.280 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.--   
(1) A dissenter may notify the corporation in writing of the dissenter's own    
estimate of the fair value of the dissenter's shares and amount of interest     
due, and demand payment of the dissenter's estimate, less any payment under     
RCW 23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and      
demand payment of the dissenter's estimate of the fair value of the             
dissenter's shares and interest due, if:                                        

(a) The dissenter believes that the amount paid under RCW 23B.13.250 or 
offered under RCW 23B.13.270 is less than the fair value of the dissenter's 
shares or that the interest due is incorrectly calculated;                  

(b) The corporation fails to make payment under RCW 23B.13.250 within   
sixty days after the date set for demanding payment; or                     

(c) The corporation does not effect the proposed action and does not    
return the deposited certificates or release the transfer restrictions      
imposed on uncertificated shares within sixty days after the date set for   
demanding payment.                                                          

(2) A dissenter waives the right to demand payment under this section unless
the dissenter notifies the corporation of the dissenter's demand in writing     
under subsection (1) of this section within thirty days after the corporation   
made or offered payment for the dissenter's shares.                             

23B.13.300 COURT ACTION.--(1) If a demand for payment under RCW 23B.13.280  
remains unsettled, the corporation shall commence a proceeding within sixty     
days after receiving the payment demand and petition the court to determine     
the fair value of the shares and accrued interest. If the corporation does not  
commence the proceeding within the sixty-day period, it shall pay each          
dissenter whose demand remains unsettled the amount demanded.                   

(2) The corporation shall commence the proceeding in the superior court of  
the county where a corporation's principal office, or, if none in this state,   
its registered office, is located. If the corporation is a foreign corporation  
without a registered office in this state, it shall commence the proceeding in  
the county in this state were the registered office of the domestic             
corporation merged with or whose shares were acquired by the foreign            
corporation was located.                                                        

(3) The corporation shall make all dissenters, whether or not residents of  
this state, whose demands remain unsettled, parties to the proceeding as in an  
action against their shares and all parties must be served with a copy of the   
petition. Nonresidents may be served by registered or certified mail or by      
publication as provided by law.                                                 

(4) The corporation may join as a party to the proceeding any shareholder   
who claims to be a dissenter but who has not, in the opinion of the             
corporation, complied with the provisions of this chapter. If the court         
determines that such shareholder has not complied with the provisions of this   
chapter, the shareholder shall be dismissed as a party.                         

C-4 

DEF 14A
108th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 108th
(5) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint  
one or more persons as appraisers to receive evidence and recommend decision    
on the question of fair value. The appraisers have the powers described in the  
order appointing them, or in any amendment to it. The dissenters are entitled   
to the same discovery rights as parties in other civil proceedings.             

(6) Each dissenter made a party to the proceeding is entitled to judgment   
(a) for the amount, if any, by which the court finds the fair value of the      
dissenter's shares, plus interest, exceeds the amount paid by the corporation,  
or (b) for the fair value, plus accrued interest, of the dissenter's after-     
acquired shares for which the corporation elected to withhold payment under     
RCW 23B.13.270.                                                                 

23B.13.310 COURT COSTS AND COUNSEL FEES.--(1) The court in a proceeding     
commenced under RCW 23B.13.300 shall determine all costs of the proceeding,     
including the reasonable compensation and expenses of appraisers appointed by   
the court. The court shall assess the costs against the corporation, except     
that the court may assess the costs against all or some of the dissenters, in   
amounts the court finds equitable, to the extent the court finds the            
dissenters acted arbitrarily, vexatiously, or not in good faith in demanding    
payment under RCW 23B.13.280.                                                   

(2) The court may also assess the fees and expenses of counsel and experts  
for the respective parties, in amounts the court finds equitable:               

(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the           
requirements of RCW 23B.13.200 through 23B.13.280;                          

(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses 
are assessed acted arbitrarily, vexatiously, or not in good faith with      
respect to the rights provided by Chapter 23B.13 RCW.                       

(3) If the court finds that the services of counsel for any dissenter were  
of substantial benefit to other dissenters similarly situated, and that the     
fees for those services should not be assessed against the corporation, the     
court may award to these counsel reasonable fees to be paid out of the amounts  
awarded the dissenters who were benefited.                                      

C-5 

DEF 14A
109th Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 109th
FLUKE CORPORATION 

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 

For the Special Meeting of Stockholders - July 7, 1998  

   The undersigned hereby appoints WILLIAM G. PARZYBOK, JR. and DAVID E.
KATRI and each of them with full power of substitution, proxies of the          
undersigned at the Special Meeting of Stockholders of Fluke Corporation         
("Fluke"), to be held in the Auditorium at the corporate headquarters of Fluke, 
6920 Seaway Boulevard, Everett, Washington, on Tuesday, July 7, 1998 at 1:00    
p.m., and at all adjournments or postponements thereof, and hereby authorizes   
them to represent and to vote all of the shares of the undersigned as fully as  
the undersigned could do if personally present. Said proxies are herein         
specifically authorized to vote the shares of Fluke which the undersigned is    
entitled to vote upon a proposal to approve the Agreement and Plan of Merger,   
dated April 24, 1998, among Danaher Corporation ("Danaher"), Falcon Acquisition 
Corp. and Fluke (the "Merger Agreement") pursuant to which Fluke will become a  
wholly-owned subsidiary of Danaher and to vote said shares upon such other      
matters as may properly come before the Meeting and any adjournment or          
postponement thereof, as the above named proxies shall determine.               

    The shares represented by this Proxy will be voted or not voted on the
matters set forth in accordance with the specifications indicated therein.      

            CONTINUED AND TO BE SIGNED ON REVERSE SIDE   SEE REVERSE
                                                          SIDE

DEF 14A
Last Page of 110
TOC
1st
Previous
Next
↓Bottom
Just 110th
1. Approval of the Merger Agreement. To approve the Merger Agreement pursuant to
which Fluke will become a wholly-owned subsidiary of Danaher and all outstanding
shares of Fluke common stock, par value $.25 per share, will be converted into  
shares of Danaher common stock, par value $.01 per share.                       

[_] FOR             [_] AGAINST            [_] ABSTAIN  

2. Other Business. To transact such other business as may properly come before  
the meeting and all adjournments or postponements thereof.                      

If no specification is made with respect hereto, such shares will be voted FOR  
approval of the Merger Agreement and either for or against such other matters as
may properly come before the meeting or any adjournment or postponement thereof,
as the above named proxies may determine.                                       

                    Signature: ________________________  Date: _________________

                    Signature: ________________________  Date: _________________
                   Sign exactly as the name appears on your stock certificate.
                   When signing as attorney, executor, administrator, guardian
                   or corporate official, please give your full title as such.

-2- 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		4/30/99		31
		12/31/98		33		89
		10/31/98		13		95
		7/10/98		38
For Period End:		7/7/98		2		109
		6/30/98		7
Filed on:		6/10/98
		6/8/98		2		23
		6/5/98		3		61
		6/3/98		34
		6/1/98		61
		5/12/98		1		34
		5/6/98		1
		5/5/98		6		61
		4/27/98		26		62
		4/24/98		3		109
		4/23/98		26
		4/22/98		30		81
		4/20/98		26
		4/16/98		25
		4/6/98		25
		4/2/98		25		99
		3/30/98		6		25
		3/27/98		6		25
		3/19/98		25
		3/17/98		6
		3/9/98		25
		1/23/98		6		79			10-Q
		1/8/98		25
		1/1/98		83
		12/31/97		6		102
		10/24/97		6
		10/15/97		18
		9/10/97		6
		7/25/97		6					10-Q
		7/23/97		6					10-K
		7/21/97		6					DEF 14A
		7/17/97		6
		4/26/97		75
		4/25/97		6		101			10-K,  DEF 14A
		1/24/97		18					10-Q
		12/31/96		54		63
		12/11/96		38
		4/26/96		63					DEF 14A
		12/31/95		54		63
		12/12/95		37
		3/10/95		6					8-A12B
		1/1/95		74		82
		4/30/93		18
		9/25/92		18
									List all Filings