Agreement And Plan Of Merger

AGREEMENT AND PLAN OF MERGER by and Among BERKSHIRE HATHAWAY INC. F SUBSIDIARY, INC. And RUSSELL CORPORATION April 17, 2006

EXHIBIT 2.1

EXECUTION VERSION

 

AGREEMENT AND PLAN OF MERGER

by and among

BERKSHIRE HATHAWAY INC.

F SUBSIDIARY, INC.

and

RUSSELL CORPORATION

April 17, 2006


TABLE OF CONTENTS

 

         Page
ARTICLE I THE MERGER    - 1 -

        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 and Officers of the Surviving Corporation    - 2 -

        Section 1.7

  Conversion of Capital Stock    - 2 -

        Section 1.8

  Exchange of Certificates    - 3 -

        Section 1.9

  Dissenting Shares    - 5 -

        Section 1.10

  Company Option Plans; Equity Based Awards    - 5 -
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY    - 6 -

        Section 2.1

  Organization of the Company and its Subsidiaries    - 7 -

        Section 2.2

  Capitalization    - 8 -

        Section 2.3

  Authorization; Validity of Agreement; Company Action    - 8 -

        Section 2.4

  Consents and Approvals; No Violations    - 9 -

        Section 2.5

  SEC Reports and Financial Statements    - 10 -

        Section 2.6

  Internal Controls and Procedures    - 10 -

        Section 2.7

  No Undisclosed Liabilities    - 11 -

        Section 2.8

  Absence of Certain Changes    - 11 -

        Section 2.9

  Employee Benefit Plans; ERISA    - 11 -

        Section 2.10

  Litigation    - 12 -

        Section 2.11

  Compliance with Laws; Permits    - 13 -

        Section 2.12

  Environmental Matters    - 13 -

        Section 2.13

  Taxes    - 14 -

        Section 2.14

  Labor Relations    - 16 -

        Section 2.15

  Real Property    - 16 -

        Section 2.16

  Proxy Statement    - 16 -

        Section 2.17

  Intellectual Property    - 17 -

        Section 2.18

  Brokers or Finders    - 17 -

        Section 2.19

  Opinion of Financial Advisor    - 17 -

        Section 2.20

  Board Recommendation    - 17 -

        Section 2.21

  Material Contracts    - 18 -

        Section 2.22

  Transactions with Affiliates    - 18 -

        Section 2.23

  Anti-Takeover Provision; Rights Plan    - 18 -

        Section 2.24

  No Other Representations    - 18 -
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB    - 19 -

        Section 3.1

  Organization    - 19 -

 

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        Section 3.2

  Authorization; Validity of Agreement; Necessary Action    - 19 -
        Section 3.3   Consents and Approvals; No Violations    - 19 -
        Section 3.4   Disclosure Documents    - 20 -
        Section 3.5   Sufficient Funds    - 20 -
        Section 3.6   Share Ownership    - 20 -
        Section 3.7   Merger Sub’s Operations    - 20 -
        Section 3.8   Not an Interested Stockholder    - 21 -
        Section 3.9   Brokers or Finders    - 21 -
        Section 3.10   Litigation    - 21 -
ARTICLE IV COVENANTS    - 21 -
        Section 4.1   Interim Operations of the Company    - 21 -
        Section 4.2   Access to Information    - 23 -
        Section 4.3   Employee Benefits    - 23 -
        Section 4.4   No Solicitation    - 25 -
        Section 4.5   Publicity    - 27 -
        Section 4.6   Directors’ and Officers’ Insurance and Indemnification    - 28 -
        Section 4.7   Stockholder Meeting; Proxy    - 29 -
        Section 4.8   Approvals and Consents; Cooperation; Notification    - 30 -
        Section 4.9   Reasonable Efforts; Further Assurances    - 32 -
        Section 4.10   Merger Sub    - 32 -
ARTICLE V CONDITIONS    - 33 -
        Section 5.1   Conditions to Each Party’s Obligation to Effect the Merger    - 33 -
        Section 5.2   Conditions to Obligation of the Company to Effect the Merger    - 33 -
        Section 5.3   Condition to Obligations of Parent and Merger Sub    - 34 -
ARTICLE VI TERMINATION    - 35 -
        Section 6.1   Termination    - 35 -
        Section 6.2   Effect of Termination    - 36 -
        Section 6.3   Termination Fee    - 36 -
ARTICLE VII MISCELLANEOUS    - 37 -
        Section 7.1   Amendment and Modification    - 37 -
        Section 7.2   Nonsurvival of Representations and Warranties    - 37 -
        Section 7.3   Notices    - 37 -
        Section 7.4   Other Defined Terms; Interpretation    - 39 -
        Section 7.5   Counterparts    - 39 -
        Section 7.6   Entire Agreement; Third Party Beneficiaries    - 39 -
        Section 7.7   Severability    - 40 -
        Section 7.8   Governing Law; Jurisdiction    - 40 -
        Section 7.9   Specific Performance    - 40 -
        Section 7.10   Assignment    - 40 -
        Section 7.11   Expenses    - 41 -
        Section 7.12   Headings    - 41 -

 

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        Section 7.13

  Waivers    - 41 -

        Section 7.14

  WAIVER OF JURY TRIAL    - 41 -

        Section 7.15

  Obligation of Parent    - 41 -

 

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TABLE OF DEFINED TERMS

 

Acquisition Proposal    Section 4.4(e)(i)
Affiliate    Section 2.18
Agreement    Preamble
Antitrust Order    Section 4.8(c)
Award    Section 4.3(d)
Award Agreement    Section 4.3(d)
Benefit Plans    Section 2.9(a)
Board of Directors    Recitals
Cash-Based Awards    Section 1.8(b)
Certificate of Merger    Section 1.3
Certificates    Section 1.8(b)
Change of Recommendation    Section 4.4(c)
Claim    Section 4.6(a)
Closing    Section 1.2
Closing Date    Section 1.2
Code    Section 2.9(b)
Company    Preamble
Company Board Recommendation    Section 4.7(b)
Company Common Stock    Section 1.7
Company Disclosure Documents    Section 2.16(a)
Company Disclosure Letter    ARTICLE II
Company Equity Plans    Section 1.10(b)
Company Intellectual Property    Section 2.17(b)
Company Material Adverse Effect    Section 2.1(a)
Company Permits    Section 2.11(b)
Company Phantom Equity Plans    Section 1.10(b)
Company Preferred Stock    Section 2.2(a)
Company SEC Documents    Section 2.5
Company Stockholder Approval    Section 4.7(a)(i)
Company Stock Option Plans    Section 1.10(a)
Company Stock Options    Section 1.10(a)
Confidentiality Agreement    Section 4.2
D&O Insurance    Section 4.6(d)
DGCL    Recitals
Dissenting Shares    Section 1.9
DOJ    Section 4.8(a)
Effective Time    Section 1.3
Employee    Section 4.3(a)
Employee Agreements    Section 2.9(a)
Entity    Section 7.4(a)(i)
Environmental Law    Section 2.12(c)(i)
Environmental Permit    Section 2.12(c)(ii)

 

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Equity Based Awards    Section 1.10(b)
ERISA    Section 2.9(a)
ERISA Affiliate    Section 2.9(a)
Exchange Act    Section 2.4
Executive Incentive Plan    Section 4.3(d)
Final Order    Section 6.1(b)(ii)
Foreign Antitrust Laws    Section 2.4
Fruit    Section 7.10
FTC    Section 4.8(a)
GAAP    Section 2.1(a)
Goldman, Sachs    Section 2.18
Governmental Entity    Section 2.4
Hazardous Substance    Section 2.12(c)(iii)
HSR Act    Section 2.4
Indemnified Party    Section 4.6(a)
IRS    Section 2.13(d)
Knowledge    Section 7.4(a)(ii)
Law    Section 2.11(a)
Legal Proceeding    Section 4.8(b)
Material Contracts    Section 2.4
Merger    Recitals
Merger Consideration    Section 1.7(c)
Merger Sub    Preamble
Parent    Preamble
Parent Material Adverse Effect    Section 3.1
Paying Agent    Section 1.8(a)
PBGC    Section 2.9(d)
Performance Shares    Section 1.8(b)
Performance Unit    Section 1.8(b)
Person    Section 7.4(a)(iii)
Proxy Statement    Section 4.7(a)(ii)
Release    Section 2.12(c)(iv)
Representatives    Section 4.4(a)
Rights    Section 2.2(a)
Rights Agreement    Section 2.2(a)
Sarbanes-Oxley Act    Section 2.6
SEC    Section 2.5
Securities Act    Section 2.4
Shares    Section 1.7
Special Meeting    Section 4.7(a)(i)
Subsidiary    Section 2.1(b)
Superior Proposal    Section 4.4(e)(ii)
Surviving Corporation    Section 1.1
Taxes    Section 2.13(g)(i)
Tax Return    Section 2.13(g)(ii)

 

ii


Termination Date    Section 6.1(b)(i)
Termination Fee    Section 6.3(a)
Title IV Plan    Section 2.9(d)

 

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of April 17, 2006 (this “Agreement”), by and among Berkshire Hathaway Inc., a Delaware corporation (“Parent”), F Subsidiary, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Parent (the “Merger Sub”), and Russell Corporation, a Delaware corporation (the “Company”).

WHEREAS, the board of directors of the Company (the “Board of Directors”) has approved this Agreement and the transactions contemplated hereby in accordance with the State of Delaware General Corporation Law (the “DGCL”), and deem it advisable and in the best interests of the Company’s stockholders, that Merger Sub merge with and into the Company (the “Merger”), with the Company to survive the Merger and to become a wholly owned subsidiary of Parent, on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, Parent and Merger Sub have taken all necessary corporate action to approve the Merger, this Agreement and the transactions contemplated hereby;

WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and other agreements in connection with the Merger as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree, and intend to be legally bound, as follows:

ARTICLE I

THE MERGER

Section 1.1 The Merger. Upon the terms and subject to conditions of this Agreement and in accordance with the DGCL, at the Effective Time, Merger Sub shall be merged with and into the Company. Following the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation (the “Surviving Corporation”).

Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at or be directed from the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, at 10:00 a.m., local time, on the first business day after the conditions to the parties’ obligation to effect the Merger contained in Article V have been satisfied or waived (the “Closing Date”), unless another date or place is agreed to in writing by the parties hereto.

 

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Section 1.3 Effective Time. On the Closing Date, the parties shall cause the Merger to be consummated by causing a certificate of merger with respect to the Merger to be executed, filed and recorded in accordance with the relevant provisions of the DGCL (the “Certificate of Merger”). The Merger shall become effective at the time of the filing with the Secretary of State of the State of Delaware of such certificate of merger in accordance with the relevant provisions of the DGCL or at such later time as shall be specified in the certificate of merger (the “Effective Time”).

Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.

Section 1.5 Certificate of Incorporation and By-Laws. Subject to Section 4.6(b) hereof, the certificate of incorporation and by-laws of Merger Sub as in effect at the Effective Time shall be the certificate of incorporation and by-laws of the Surviving Corporation, provided that Article First of the certificate of incorporation of the Surviving Corporation shall be amended to read in its entirety as follows: “FIRST” The name of the Corporation is Russell Corporation.”

Section 1.6 Directors and Officers of the Surviving Corporation. The directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and will hold office from the Effective Time until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in the manner provided in the certificate of incorporation and by-laws of the Surviving Corporation, or as otherwise provided by law. The officers of Merger Sub immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and will hold office from the Effective Time until their respective successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in the manner provided in the certificate of incorporation and by-laws of the Surviving Corporation, or as otherwise provided by law.

Section 1.7 Conversion of Capital Stock. As of the Effective Time, by virtue of the Merger and without any action on the part of any of the holders of the issued and outstanding shares of common stock, par value $.01 per share, of the Company (referred to herein as either the “Shares” or “Company Common Stock”) or the common stock of the Parent:

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

(b) Cancellation of Treasury Stock and Parent-Owned Stock. Any shares of Company Common Stock owned by Parent, Merger Sub or any other Subsidiary (as defined below) of Parent, and any shares of Company Common Stock owned by the Company as treasury stock, shall be cancelled and retired and shall cease to exist and no consideration shall be delivered in exchange therefore.

 

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(c) Exchange of Shares. Each issued and outstanding share of Company Common Stock (other than Shares to be cancelled in accordance with Section 1.7(b) hereof and any Dissenting Shares (if applicable and as defined in Section 1.9 hereof)), shall be converted automatically into and shall thereafter represent the right to receive $18.00 in cash without interest (the “Merger Consideration”), payable to the holder thereof upon surrender of the certificate formerly representing such share of Company Common Stock in the manner provided in Section 1.8 hereof. All such shares of Company Common Stock, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration therefor upon the surrender of such certificate in accordance with Section 1.8 hereof, without interest.

(d) Adjustments. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company shall occur as a result of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period (excluding, in each case, normal quarterly cash dividends), the Merger Consideration and any other similarly dependent items shall be equitably adjusted to reflect such change.

Section 1.8 Exchange of Certificates.

(a) Paying Agent. Prior to the Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent for the holders of shares of Company Common Stock in connection with the Merger (the “Paying Agent”) to receive and make the payments of the funds to which holders of shares of Company Common Stock shall become entitled pursuant to Section 1.7(c) hereof. When and as needed, Parent shall deposit or cause to be deposited with the Paying Agent such funds in trust for the benefit of the holders of shares of Company Common Stock for exchange in accordance with Section 1.7 hereof, for timely payment hereunder. Such funds shall be invested by the Paying Agent as reasonably directed by Parent or the Surviving Corporation, with any net profit resulting from, or interest or income produced by, such investments payable to Parent; provided, however, that no such investment or loss thereon shall reduce the amounts payable to holders of Company Common Stock pursuant to this Article I.

(b) Exchange Procedures. As soon as reasonably practicable after the Effective Time, the Paying Agent shall 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”), whose shares were converted pursuant to Section 1.7 hereof into the right to receive the Merger Consideration, (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 delivery of the Certificates to the Paying Agent and shall be in such form and have such other provisions as Parent and the Company may reasonably specify) and (ii) instructions for

 

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use in effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration (subject to subsection (e) below) for each share of Company Common Stock formerly represented by such Certificate and the Certificate so surrendered shall forthwith be cancelled. If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and that the person requesting such payment shall have paid any transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of the Surviving Corporation that such tax either has been paid or is not applicable. Until surrendered as contemplated by this Section 1.8, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration in cash as contemplated by this Section 1.8.

(c) Transfer Books; No Further Ownership Rights in Company Common Stock. At the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of shares of Company Common Stock on the records of the Company. From and after the Effective Time, the holders of Certificates evidencing ownership of shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares, except as otherwise provided for herein or by applicable law. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article I.

(d) Termination of Fund; No Liability. At any time following one year after the Effective Time, Parent or the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) which had been deposited with the Paying Agent and which have not been disbursed to holders of Certificates, and thereafter such holders shall be entitled to look only to Parent or the Surviving Corporation (subject to abandoned property, escheat or other similar laws) as general creditors thereof with respect to the Merger Consideration that may be payable upon due surrender of their Certificates, as determined pursuant to this Agreement, without any interest thereon. Notwithstanding the foregoing, none of Parent, the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Certificate for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(e) Withholding Taxes. Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to a holder of Shares pursuant to the Merger such amounts as Parent,

 

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the Surviving Corporation or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Code (as defined below) or any provision of state, local or foreign tax law. To the extent amounts are so withheld by Parent, the Surviving Corporation or the Paying Agent, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which the deduction and withholding was made.

Section 1.9 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, holders of Shares who have properly exercised, perfected and not subsequently withdrawn or lost their appraisal rights with respect thereto in accordance with Section 262 of the DGCL (the “Dissenting Shares”) shall not have any of such Shares converted into or become exchangeable for the right to receive the Merger Consideration, and holders of such Shares shall be entitled only to such rights as are granted by such Section 262, including the right to receive payment of the appraised value of such Shares in accordance with the provisions of such Section 262 unless and until such holders fail to perfect or shall have effectively withdrawn or lost their rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or shall have effectively withdrawn or lost such right, each of such holder’s Shares shall thereupon be treated as if it had been converted into and to have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration without interest thereon, as provided in Section 1.7(c) hereof. Notwithstanding anything to the contrary contained in this Section 1.9, if this Agreement is terminated prior to the Effective Time, then the right of any holder to be paid the fair value of such holder’s Dissenting Shares pursuant to Section 262 of the DGCL shall cease. The Company shall give Parent (i) prompt notice of any demands received by the Company for appraisal of Dissenting Shares, withdrawals of such demands and any other instruments served pursuant to the DGCL relating to rights of appraisal which are received by the Company, and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL. The Company shall not, except with the prior written consent of Parent or as otherwise required by applicable Law, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

Section 1.10 Company Option Plans; Equity Based Awards.

(a) Immediately prior to the Effective Time, all options to purchase shares of Company Common Stock (the “Company Stock Options”) granted under any plan, arrangement or agreement that provide for the grant of Company Stock Options (the “Company Stock Option Plans”) shall be cancelled by the Company and shall no longer be outstanding thereafter. In consideration for such cancellation, the holder thereof shall thereupon be entitled to receive, immediately prior to the Effective Time, a cash payment from the Company in respect of such cancellation in an amount (if any) equal to the product of (x) the number of shares of Company Common Stock subject to such Company Stock Option (whether or not vested at the time of such cancellation) and (y) the excess, if any, of the Merger Consideration over the exercise price per share of Company Common Stock subject to such Company Stock Option, reduced by any income or employment Tax required to be withheld with respect to such payment.

 

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(b) Immediately prior to the Effective Time, all stock appreciation rights, restricted stock units or other phantom equity based awards (the “Equity Based Awards”) granted under any plan, arrangement or agreement that provides for the grant of Equity Based Awards (the “Company Phantom Equity Plans”, and together with the Company Stock Option Plans, the “Company Equity Plans”), shall be cancelled by the Company and shall no longer be outstanding thereafter. In consideration for such cancellation, the holder thereof shall thereupon be entitled to receive, immediately prior to the Effective Time, a cash payment from the Company in respect of such cancellation in an amount (if any) equal to the product of (x) the number of shares of Company Common Stock subject to such Equity Based Awards (whether or not vested at the time of such cancellation) and (y) the excess, if any, of the Merger Consideration over the exercise price or strike price (or equivalent thereof, as applicable) per share of Company Common Stock subject to such Equity Based Awards, reduced by any income or employment tax required to be withheld with respect to such payment. This Section 1.10(b) shall not apply to Cash-Based Awards (each a “Cash-Based Award”), Performance Shares (each a “Performance Share”) or Performance Units (each a “Performance Unit”) under the Executive Incentive Plan, the treatment of which is governed by Section 4.3(d).

(c) Prior to the Effective Time, Parent and the Company shall use their respective reasonable efforts to establish a procedure to effect the surrender of the Company Stock Options and Equity Based Awards contemplated by this Section 1.10. Prior to the Effective Time, the Board of Directors (or, if appropriate, any committee thereof), will adopt appropriate resolutions and take such other actions necessary or appropriate to provide that (i) the Company Equity Plans and all awards issued thereunder (including, without limitation, the Company Stock Options and Equity Based Awards) will terminate immediately prior to the Effective Time and (ii) the provisions in any other plan, program, arrangement or agreement providing for the issuance or grant of any other interest in respect of the equity of the Company shall be of no further force or effect and shall terminate as of immediately prior to the Effective Time. Prior to the Closing, the Company shall take all necessary and appropriate actions to give effect to, and accomplish, the transactions contemplated by this Section 1.10, including but not limited to the payments contemplated by Sections 1.10(a) and 1.10(b) immediately prior to the Effective Time.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in the Company SEC Documents or in the disclosure letter delivered to Parent and Merger Sub immediately prior to or at the execution of this Agreement (it being agreed that any information set forth in one section of such disclosure

 

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letter shall be deemed to apply to each other section thereof to which its relevance is reasonably apparent on its face) (the “Company Disclosure Letter”), the Company represents and warrants to Parent and Merger Sub as follows:

Section 2.1 Organization of the Company and its Subsidiaries.

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where the failure to be so would not, individually or in the aggregate, have a Company Material Adverse Effect. For the purposes of this Agreement, “Company Material Adverse Effect” means an effect which is materially adverse to the financial condition, business or results of operations of the Company and its Subsidiaries, taken as a whole, but shall exclude any effect resulting from or arising out of (A) seasonal fluctuations in the business of the Company and its Subsidiaries, (B) any acts of terrorism, war, national or international calamity or any other similar event, (C) the taking of any action required by, or the failure to take any action prohibited by, this Agreement, (D) the announcement or pendency of the Agreement or the Merger (including stockholder litigation in connection therewith), (E) general economic, business, financial or market conditions, (F) conditions affecting any of the industries or industry sectors in which the Company or any of its Subsidiaries operates, or (G) any change in law, rule or regulation or accounting principles generally acceptable in the United States (“GAAP”) or interpretation of any of the foregoing.

(b) Each Subsidiary of the Company is a corporation, partnership or limited liability company duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, has all requisite corporate, partnership or limited liability company power and authority to carry on its business substantially as now conducted and is duly qualified to do business as a foreign corporation or partnership and is in good standing in each jurisdiction where the character of the property owned or leased by it or the nature of its activities makes such qualification necessary, except where the failure to be so would not have, individually or in the aggregate, a Company Material Adverse Effect. For the purposes of this Agreement, “Subsidiary” means, with respect to any party, any corporation, partnership or other Entity or organization, whether incorporated or unincorporated, of which (i) such party or any other Subsidiary of such party is a general partner (excluding such partnerships where such party or any Subsidiary of such party does not have a majority of the voting interest in such partnership) or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries.

 

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Section 2.2 Capitalization.

(a) As of the date hereof, the authorized capital stock of the Company consists of 150,000,000 shares of Company Common Stock and 10,000,000 shares of Preferred Stock, par value $.01 per share (the “Company Preferred Stock”), of which 500,000 have been designated as Series A Junior Participating Preferred Stock. As of March 31, 2006, (i) 33,184,790 shares of Company Common Stock were issued and outstanding (excluding treasury stock), (ii) 500,000 shares of Company Preferred Stock issuable pursuant to the Rights Agreement, dated as of September 15, 1999, between the Company and Sun Trust Bank, Atlanta, as Rights Agent, as amended by the Amendment to Rights Agreement dated as of April 27, 2005, between the Company and SunTrust Bank (formerly known as Sun Trust Bank, Atlanta), as Rights Agent (the “Rights Agreement”) were reserved for issuance in connection with the rights issued pursuant to the Rights Agreement (the “Rights”), (iii) 8,654,614 shares of Company Common Stock were issued and held in the treasury of the Company, and (iv) there were no shares of Company Preferred Stock issued and outstanding. From March 31, 2006 through the date hereof, no additional shares of capital stock have been issued (except for shares of Company Common Stock and options therefore issued pursuant to Company Equity Plans). As of the date of this Agreement, 2,822,637 shares of Company Common Stock were reserved for issuance pursuant to the Company Equity Plans of which 2,577,497 shares of Company Common Stock were issuable pursuant to outstanding Company Stock Options and 1,178,875 shares were subject to Equity Based Awards. All the outstanding shares of the Company’s capital stock are duly authorized, validly issued, fully paid, and non-assessable. Except as disclosed in Section 2.2(a) of the Company Disclosure Letter, as of the date hereof, there are no existing (i) options, warrants, calls, subscriptions or other rights, convertible securities, agreements or commitments of any character obligating the Company or any of its Subsidiaries to issue, transfer or sell any shares of capital stock or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (ii) contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of the Company or any of its Subsidiaries of the Company or (iii) voting trusts or similar agreements to which the Company is a party with respect to the voting of the capital stock of the Company.

(b) All of the outstanding shares of capital stock (or equivalent equity interests of entities other than corporations) of each of the Company’s Subsidiaries are owned of record and beneficially, directly or indirectly, by the Company.

Section 2.3 Authorization; Validity of Agreement; Company Action. The Company has the requisite corporate power and authority to execute and deliver this Agreement and, subject to obtaining the necessary approval of its stockholders, to consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by its Board of Directors and,

 

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except for obtaining the approval of its stockholders as contemplated by Section 4.7 hereof, no other corporate action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement and the consummation by it of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and, subject to approval and adoption of this Agreement by the Company’s stockholders (and assuming due and valid authorization, execution and delivery hereof by Parent and Merger Sub) is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

Section 2.4 Consents and Approvals; No Violations. Except for (a) filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (b) filings pursuant to foreign antitrust or competition Laws (“Foreign Antitrust Laws”), (c) applicable requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), (c) the filing of the Certificate of Merger, and (d) applicable requirements under corporation or “blue sky” laws of various states, or matters specifically described in this Agreement, the transactions contemplated hereby do not require any consent, approval, compliance exemption, authorization or other action by, or filing with any United States or foreign court, legislative, executive or regulatory authority or agency (a “Governmental Entity”), except for the filings or approvals which are not required prior to the consummation of the Merger or where the failure to take such action or make such filing would not have, individually or in the aggregate, a Company Material Adverse Effect. Except as disclosed in Section 2.4(ii) of the Company Disclosure Letter, neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will (i) violate any provision of the certificates of incorporation or by-laws of the Company or any of its Subsidiaries, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets are bound and which has been filed as an exhibit to the Company SEC Documents (the “Material Contracts”), (iii) violate any material order, writ, judgment, injunction, decree, law, statute, rule or regulation applicable to the Company, any of its Subsidiaries or any of their properties or assets, or (iv) except as specified in the immediately preceding sentence, require on the part of the Company any material filing or registration with, notification to, or authorization, consent or approval of, any Governmental Entity; except in the case of clauses (ii), (iii) or (iv) for such violations, breaches or defaults which, or filings, registrations, notifications, authorizations, consents or approvals the failure of which to obtain, would not have, individually or in the aggregate, a Company Material Adverse Effect.

 

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Section 2.5 SEC Reports and Financial Statements. Since January 1, 2004, the Company has filed or furnished all reports required to be filed or furnished by it with the United States Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act and the Securities Act (as such documents have been amended since the date of their filing, collectively, the “Company SEC Documents”). The Company SEC Documents, as of their respective filing dates, or if amended, as of the date of the last such amendment, did not, to the Knowledge of the Company, contain any untrue statement of a material fact or omit 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. The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in the Company SEC Documents fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods indicated (subject, in the case of the unaudited statements, to normal year-end audit adjustments and other adjustments described therein, including in the notes thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto).

Section 2.6 Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). The Company’s management has completed an assessment of the effectiveness of the Company’s internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2005, and such assessment concluded that such controls were effective and the Company’s independent registered accountant has issued an attestation report concluding that the Company maintained effective internal control over financial reporting as of December 31, 2005. Except as disclosed in Section 2.6 of the Company Disclosure Letter, the Company is unaware of any “significant deficiencies,” as defined by the Public Company Accounting Oversight Board, in the structure or application of its internal control over financial reporting.

 

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Section 2.7 No Undisclosed Liabilities. Except for liabilities and obligations (a) incurred in the ordinary course of business since December 31, 2005, (b) disclosed in the Company SEC Documents, or (c) incurred in connection with the transactions contemplated by this Agreement, since December 31, 2005, neither the Company nor any of its Subsidiaries has incurred any material liabilities or obligations that would be required to be reflected or reserved against in a consolidated balance sheet of the Company and its consolidated Subsidiaries prepared in accordance with GAAP, other than those which would not have, individually or in the aggregate, a Company Material Adverse Effect.

Section 2.8 Absence of Certain Changes. Except as (a) disclosed in Section 2.8 of the Company Disclosure Letter or (b) required or permitted by this Agreement, since December 31, 2005 and through the date hereof, (i) there has not occurred any change, effect, event or occurrence that would have, individually or in the aggregate, a Company Material Adverse Effect; and (ii) the Company has not (a) amended its certificate of incorporation or by-laws; (b) split, combined or reclassified the Company Common Stock or any capital stock of any of the Subsidiaries of the Company; (c) declared or set aside or paid any dividend or other distribution with respect to the Company Common Stock; or (d) materially changed the Company’s accounting methods, except as required by GAAP or applicable law.

Section 2.9 Employee Benefit Plans; ERISA.

(a) Section 2.9(a) of the Company Disclosure Letter sets forth a list of all material employee benefit plans, (including but not limited to plans described in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), maintained by the Company or by any trade or business, whether or not incorporated (an “ERISA Affiliate”), which together with the Company would be deemed a “single employer” within the meaning of section 4001(b)(15) of ERISA (“Benefit Plans”) and all material employment and severance agreements with employees of the Company (“Employee Agreements”). True and complete copies of all Employee Agreements, including all amendments to date, have been made available to Parent by the Company.

(b) With respect to each Benefit Plan: (i) if intended to qualify under section 401(a) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “Code”), such plan has received a determination letter from the Internal Revenue Service stating that it so qualifies and that its trust is exempt from taxation under section 501(a) of the Code and nothing has occurred to the Knowledge of the Company since the date of such determination that could materially adversely affect such qualification or exempt status; (ii) such plan has been administered in all material respects in accordance with its terms and applicable law; (iii) no breaches of fiduciary duty have occurred which might reasonably be expected to give rise to material liability on the part of the Company; (iv) no disputes are pending, or, to the Knowledge of the Company, threatened that give rise to or might reasonably be expected to give rise to material liability on the part of the Company; and

 

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(v) no prohibited transaction (within the meaning of Section 406 of ERISA) has occurred that give rise to or might reasonably be expected to give rise to material liability on the part of the Company.

(c) No Benefit Plan is a “multiemployer pension plan,” as defined in section 3(37) of ERISA, nor is any Benefit Plan a plan described in section 4063(a) of ERISA.

(d) Each of the Benefit Plans that is subject to section 302 or Title IV of ERISA or section 412 of the Code is hereinafter referred to in this Section 2.9 as a (“Title IV Plan”). No liability under Title IV or section 302 of ERISA has been incurred by the Company or by any ERISA Affiliate that together with the Company would be deemed a “single employer” within the meaning of section 4001(b) of ERISA that has not been satisfied in full, and no condition exists that presents a material risk to the Company or any ERISA Affiliate of incurring any such liability, other than liability for premiums due the Pension Benefit Guaranty Corporation (“PBGC”) (which premiums have been paid when due). Insofar as the representation made in this Section 2.9(d) applies to sections 4064, 4069 or 4204 of Title IV of ERISA, it is made with respect to any employee benefit plan, program, agreement or arrangement subject to Title IV of ERISA to which the Company or any ERISA Affiliate made, or was required to make, contributions during the 5-year period ending on the last day of the most recent plan year ended prior to the Closing Date. The PBGC has not instituted proceedings to terminate any Title IV Plan and, to the Knowledge of the Company, no condition exists that presents a material risk that such proceedings will be instituted. No Title IV Plan or any trust established thereunder has incurred any “accumulated funding deficiency” (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, as of the last day of the most recent fiscal year of each Title IV Plan ended prior to the Closing Date. In connection with the freezing of the Company’s defined benefit plans, the Company has complied in all material respects with the applicable provisions of the Code and ERISA (including, without limitation, providing timely notices to participants and affected employee organizations).

(e) Except as disclosed in Section 2.9(e) of the Company Disclosure Letter, no amounts payable under the Plans will fail to be deductible for federal income tax purposes by virtue of section 280G of the Code. Except as disclosed in Section 2.9(e) of the Company Disclosure Letter, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former employee or officer of the Company or any ERISA Affiliate to severance pay, unemployment compensation or any other payment, except as expressly provided in this Agreement, or (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee or officer.

Section 2.10 Litigation. Except as disclosed in Section 2.10 of the Company Disclosure Letter, as of the date hereof, there are no (a) actions, suits, inquiries, claims or proceedings pending (or, to the Knowledge of the Company, threatened) against

 

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the Company or any of its Subsidiaries, or any of their respective properties at law or in equity before, or (b) orders, judgments or decrees of, or before, any Governmental Entity, which, in the case of either (a) or (b), would have, individually or in the aggregate, a Company Material Adverse Effect.

Section 2.11 Compliance with Laws; Permits.

(a) Except as disclosed in Section 2.11 of the Company Disclosure Letter, the Company and each of its Subsidiaries are in substantial compliance with and are not in default under or in violation of any applicable material federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment or order, issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (each, a “Law” and collectively, “Laws”), except where such non-compliance, default or violation would not have, individually or in the aggregate, a Company Material Adverse Effect.

(b) The Company and its Subsidiaries are in possession of all material authorizations, licenses, permits, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and its Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits would not have, individually or in the aggregate, a Company Material Adverse Effect. All Company Permits are in full force and effect, except where the failure to be in full force and effect would not have, individually or in the aggregate, a Company Material Adverse Effect.

Section 2.12 Environmental Matters.

(a) Except (i) as disclosed in Section 2.12(a) of the Company Disclosure Letter or (ii) as would not, individually or in the aggregate, have a Company Material Adverse Effect:

(i) each of the Company and its Subsidiaries is in compliance with all applicable Environmental Laws and has obtained and is in compliance with all Environmental Permits necessary for the conduct of its business;

(ii) there has been no penalty or fine assessed, and no investigation, action, claim, suit or proceeding pending or, to the Knowledge of the Company, threatened by any Person involving the Company or any of its Subsidiaries relating to or arising out of any Environmental Law, which has not been resolved in all material respects; and

(iii) to the Knowledge of the Company, the Company has not disposed or Released any Hazardous Substances at, on, above, under or from any properties currently owned, leased, operated or used by the Company or any Subsidiary of the Company that are reasonably likely to require an investigation or remediation pursuant to applicable Environmental Law.

 

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(b) The representations and warranties set forth herein are the Company’s sole and exclusive representation and warranties with respect to environmental matters.

(c) For the purposes of this Section 2.12,

(i) “Environmental Law” means any foreign, federal, state or local Law regulating or relating to the protection of human health, safety (as it relates to Releases of Hazardous Substances), natural resources or the environment, including laws relating to wetlands, pollution, contamination or the use, generation, management, handling, transport, treatment, disposal, storage, Release or threatened Release of Hazardous Substances;

(ii) “Environmental Permit” means any permit, license, authorization or consent required to be obtained by the Company or its Subsidiaries from any Governmental Entity pursuant to applicable Environmental Laws to enable the Company and its Subsidiaries to conduct their businesses in substantially the manner they are being conducted as of the date of the Agreement;

(iii) “Hazardous Substance” means any substance that: (i) is or contains asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum, petroleum products or petroleum-derived substances or wastes, radon gas or microbial or microbiological contamination or related materials, (ii) requires investigation or remedial action pursuant to any Environmental Law, or is defined, listed or identified as a “hazardous waste,” “hazardous substance,” “toxic substance” or words of similar import under any Environmental Law, or (iii) is regulated under any Environmental Law; and

(iv) “Release” means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, or seeping, dispersal, migration, transporting, placing and the like, including the moving of any materials of Hazardous Substances into or through , into or upon any land, soil, surface water, groundwater or air, or otherwise entering into the indoor or outdoor environment.

Section 2.13 Taxes.

(a) Each of the Company and its Subsidiaries has timely filed, or has caused to be timely filed on its behalf, all material Tax Returns (as defined below) required to be filed by it, and all such Tax Returns are true, complete and accurate in all material respects. All Taxes shown to be due and owing on such Tax Returns have been timely paid, except for such amounts as would not, individually or in the aggregate, be material.

 

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(b) The most recent financial statements contained in the Company SEC Documents reflect, in accordance with GAAP, an adequate reserve for all Taxes payable by the Company and its subsidiaries for all taxable periods through the date of such financial statements.

(c) Except as disclosed in Section 2.13(c) of the Company Disclosure Letter, there is no audit, examination, deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any material Taxes or material Tax Return of the Company or its Subsidiaries; to the Knowledge of the Company; no material deficiency with respect to any Taxes has been proposed, asserted or assessed against the Company or any of its Subsidiaries; and no requests for waivers of the time to assess any material amount of Taxes are pending.

(d) The federal income Tax Returns of the Company and its Subsidiaries have been examined by and settled with the Internal Revenue Service (“IRS”) (or the applicable statutes of limitation have lapsed) for all years through 2002. All material assessments for Taxes due with respect to such completed and settled examinations or any concluded litigation have been fully paid.

(e) There are no outstanding written agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any material Taxes or deficiencies against the Company or any of its Subsidiaries, and no power of attorney granted by either the Company or any of its Subsidiaries with respect to any material Taxes is currently in force.

(f) The representations and warranties set forth herein are the Company’s sole and exclusive representation and warranties with respect to tax matters.

(g) For the purposes of this Agreement,

(i) “Taxes” means any and all federal, state, local, foreign or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including, without limitation, taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation, or net worth, and taxes or other charges in the nature of excise, withholding, ad valorem or value added; and

(ii) “Tax Return” means any return, report or similar statement (including the schedules attached thereto) required to be filed with respect to Taxes, including, without limitation, any information return, claim for refund, amended return, or declaration of estimated Taxes.

 

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Section 2.14 Labor Relations. Except as disclosed in Section 2.14 of the Company Disclosure Letter, none of the Company or any of its Subsidiaries are party to any collective bargaining agreement. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, (a) the Company and its Subsidiaries are in compliance in all material respects with all applicable laws respecting employment and employment practices and terms and conditions of employment; (b) none of the Company or any of its Subsidiaries has received written notice of any charge or complaint against the Company or any of its Subsidiaries pending before the Equal Employment Opportunity Commission, the National Labor Relations Board, or any other Governmental Entity regarding an unlawful employment practice; (c) there is no labor strike, slowdown or stoppage actually pending or, to the Knowledge of the Company, threatened or being carried out against the Company or its Subsidiaries; and (d) neither the Company or any of its Subsidiaries has received written notice that any representation petition respecting the employees of the Company or its Subsidiaries has been filed with the National Labor Relations Board or analogous Governmental Entity.

Section 2.15 Real Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries owns and has valid title to all of its owned real property and has valid leasehold interests in all of its leased properties, except for properties and assets that have been disposed of in the ordinary course of business since December 31, 2005, free and clear of all liens (except for liens and all other title exceptions, defects, encumbrances and other matters, whether or not of record, which do not materially and adversely affect the continued use of the property for the purposes for which the property is currently being used by the Company and its Subsidiaries as of the date hereof or as disclosed in Section 2.15 of the Company Disclosure Letter).

Section 2.16 Proxy Statement.

(a) Each document filed by the Company with the SEC or distributed or otherwise disseminated by the Company to the Company’s stockholders in connection with the transactions contemplated by this Agreement (the “Company Disclosure Documents”), including, without limitation, the Proxy Statement, to be filed with the SEC in connection with the Merger, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act.

(b) The Proxy Statement, as supplemented or amended, if applicable, at the time such Proxy Statement or any amendment or supplement thereto is first mailed to stockholders of the Company and at the time such stockholders vote on adoption of this Agreement, and (ii) any Company Disclosure Documents (other than the Proxy Statement), at the time of filing of such Company Disclosure Documents, or any supplement or amendment thereto and at the time of any distribution and dissemination thereof, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not

 

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misleading. The representations and warranties contained in this Section 2.16 will not apply to any statements or omissions which are based on information furnished to the Company by or on behalf of Parent or Merger Sub and that are included in the Company Disclosure Documents.

Section 2.17 Intellectual Property.

(a) Except for such claims, which individually or in the aggregate, would not have a Company Material Adverse Effect, as of the date hereof, there are no pending or threatened claims of which the Company or its Subsidiaries have been given written notice, by any person against their use of any Company Intellectual Property. The Company and its Subsidiaries have such ownership of or such rights by license, lease or other agreement to the Company Intellectual Property as are necessary to permit them to conduct their respective operations as currently conducted, except where the failure to have such rights would not have, individually or in the aggregate, a Company Material Adverse Effect.

(b) For the purposes of this Section 2.17, “Company Intellectual Property” shall mean each of the following owned by the Company: (a) trademarks, service marks, trade names and Internet domain names, together with all goodwill connected therewith or symbolized thereby; (b) patents (including any continuations and continuations in part); (c) copyrights; (d) trade secrets and know-how; (e) other intellectual property rights; and (f) registrations and applications for registration of any of the foregoing.

Section 2.18 Brokers or Finders. The Company represents, as to itself, its Subsidiaries and its affiliates (as such term is defined in Rule 12b-2 of the Exchange Act) (“Affiliates”), that no agent, broker, investment banker, financial advisor or other firm or person is or will be entitled to any brokers’ or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement, except Goldman, Sachs & Co. (“Goldman, Sachs”).

Section 2.19 Opinion of Financial Advisor. The Board of Directors has received the opinion of Goldman, Sachs, its financial advisor in connection with the transactions contemplated by this Agreement, to the effect that, as of the date of this Agreement and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be received by the holders of Shares pursuant to this Agreement is fair from a financial point of view to such holders.

Section 2.20 Board Recommendation. The Board of Directors of the Company, at a meeting duly called and held, has (A) approved this Agreement (including all terms and conditions set forth herein) and the transactions contemplated hereby, including the Merger, (B) determined that the Merger is advisable and that the terms of the Merger are fair to, and in the best interests of, the Company’s stockholders, and (C) subject to Section 4.4, resolved to recommend that the Company’s stockholders approve and adopt this Agreement and the Merger.

 

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Section 2.21 Material Contracts. As of the date of this Agreement, other than the Material Contracts (i) there is no contract, agreement or understanding required to be described in or filed as an exhibit to any Company SEC Document and (ii) neither the Company nor any of its Subsidiaries is a party to or bound by any contract containing any covenant materially limiting the right of the Company or its Subsidiaries to engage in any material line of business or compete with any person in any material line of business. Neither the Company nor any Subsidiary of the Company is in breach of or default under the terms of any Material Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect.

Section 2.22 Transactions with Affiliates. Since the date the Company’s last proxy statement was filed with the SEC filed, no event has occurred as of the date hereof that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC.

Section 2.23 Anti-Takeover Provision; Rights Plan.

(a) No “moratorium,” “control share,” “fair price,” “business combination” or other anti-takeover Laws are applicable to the Merger or any of the other transactions contemplated by this Agreement. Except for the Rights and related Rights Agreement, the Company is not a party to any stockholder rights agreement or otherwise subject to a stockholder rights plan or similar arrangement.

(b) The Company has taken all actions necessary (subject only to execution by the Rights Agent, which the Company shall cause to take place as soon as reasonably practicable on the date hereof) to (a) render the Rights Agreement inapplicable to this Agreement and the transactions contemplated hereby, (b) ensure that (i) none of Parent, Merger Sub or any other Subsidiary of Parent is an Acquiring Person (as defined in the Rights Agreement) pursuant to the Rights Agreement solely as a result of this Agreement or the transactions contemplated hereby and (ii) a Distribution Date (as defined in the Rights Agreement) does not occur solely by reason of the execution of this Agreement or the consummation of the transactions contemplated hereby, and (c) provide that the Expiration Date (as defined in the Rights Agreement) shall occur concurrently with the Effective Time.

Section 2.24 No Other Representations. Except as specifically set fort in this Article II, the Company has not made, and neither Parent nor Merger Sub has relied upon, any other representations or warranties, whether express or implied.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

AND MERGER SUB

Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

Section 3.1 Organization. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and each has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly qualified or licensed to do business as a foreign corporation and in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where the failure to be duly qualified would not, individually or in the aggregate, have a Parent Material Adverse Effect. For the purposes of this Agreement, “Parent Material Adverse Effect” means an effect that has a material adverse effect upon Parent or Merger Sub’s ability to consummate the Merger.

Section 3.2 Authorization; Validity of Agreement; Necessary Action. Each of Parent and Merger Sub has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by each of Parent and Merger Sub of this Agreement, and the consummation by each of them of the transactions contemplated hereby, have been duly authorized by all necessary corporate action and no other corporate action on the part of either Parent or Merger Sub is necessary to authorize the execution and delivery by each of Parent and Merger Sub of this Agreement and the consummation by each of them of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the each of Parent and Merger Sub, as the case may be, (and assuming due and valid authorization, execution and delivery hereof by the Company) is a valid and binding obligation of each of Parent and Merger Sub enforceable against each of them in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

Section 3.3 Consents and Approvals; No Violations. Except for (a) filings pursuant to the HSR Act, (b) filings pursuant to any Foreign Antitrust Law, (c) applicable requirements under the Exchange Act, (c) the filing of the Certificate of Merger, and (d) applicable requirements under corporation or “blue sky” laws of various states, or matters specifically described in this Agreement, the transactions contemplated hereby do not require any consent, approval, compliance exemption, authorization or other action by, or filing with any Governmental Entity, except for the filings or approvals which are not required prior to the consummation of the Merger or where the failure to take such action or make such filing would not have, individually or in the aggregate, a Parent Material

 

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Adverse Effect. Neither the execution, delivery or performance of this Agreement by Parent or Merger Sub nor the consummation by Parent or Merger Sub of the transactions contemplated hereby will (i) violate any provision of the certificate of incorporation or by-laws of Parent, Merger Sub or any of their respective Subsidiaries, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which the Parent or any of its Subsidiaries is a party, (iii) violate any material order, writ, judgment, injunction, decree, law, statute, rule or regulation applicable to Parent or any of its Subsidiaries or any of their properties or assets, or (iv) except as specified in the immediately preceding sentence, require on the part of Parent or any of it Subsidiaries any material filing or registration with, notification to, or authorization, consent or approval of, any Governmental Entity; except in the case of clauses (ii), (iii) or (iv) for such violations, breaches or defaults which, or filings, registrations, notifications, authorizations, consents or approvals the failure of which to obtain, would not have, individually or in the aggregate, a Parent Material Adverse Effect.

Section 3.4 Disclosure Documents. The information with respect to Parent and Merger Sub that Parent and Merger Sub, as the case may be, furnishes to the Company in writing for use in the Company Disclosure Documents (including the Proxy Statement), at the respective times of the filing with the SEC and distribution or dissemination thereof, and in the case of the Proxy Statement, if applicable, at the date it or any amendment or supplement is first mailed to stockholders and at the time such stockholders vote on adoption of this Agreement, will not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

Section 3.5 Sufficient Funds. As of the date hereof, Parent has, and Parent will make available to Merger Sub at the Closing Date, sufficient cash or other sources of immediately available funds to enable it to pay the Merger Consideration as required by this Agreement.

Section 3.6 Share Ownership. None of Parent, Merger Sub or any of their respective “affiliates” or “associates” (as those terms are defined in Rule 12b-2 under the Exchange Act) directly or indirectly owns, beneficially or otherwise, and since January 1, 2003 none of Parent, Merger Sub or any of their respective “affiliates” or “associates” has directly or indirectly owned, beneficially or otherwise, any Shares.

Section 3.7 Merger Sub’s Operations. Merger Sub is an indirect wholly-owned subsidiary of Parent formed solely for the purpose of engaging in the transactions contemplated hereby and has not engaged in any business activities or conducted any operations other than in connection with the transactions contemplated hereby.

 

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Section 3.8 Not an Interested Stockholder. Neither Parent nor any of its “affiliates” or “associates” is or has been during the past three years an “interested stockholder” (as such terms are defined in Section 203 of the DGCL) of the Company.

Section 3.9 Brokers or Finders. Parent and Merger Sub each represents, as to itself, its Subsidiaries and its Affiliates, that no agent, broker, investment banker, financial advisor or other firm or person is or will be entitled to any brokers’ or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.

Section 3.10 Litigation. As of the date hereof, there are no (a) actions, suits, inquiries, claims or proceedings pending (or, to the Knowledge of Parent, threatened) against or affecting Parent or Merger Sub or any of their respective Subsidiaries, or any of their respective properties at law or in equity before, or (b) orders, judgments or decrees of, or before, any Governmental Entity, which would impair in any material respect the ability of each of Parent and Merger Sub to perform its respective obligations under this Agreement, as the case may be, or prevent or materially delay the consummation of the transactions contemplated hereby.

ARTICLE IV

COVENANTS

Section 4.1 Interim Operations of the Company. From the date hereof until the Effective Time, the Company covenants and agrees that, except (i) as contemplated by this Agreement, (ii) as disclosed in Section 4.1 of the Company Disclosure Letter or (iii) as agreed in writing by Parent:

(a) the Company and its Subsidiaries shall continue to operate in a manner which is consistent with the Company’s restructuring plan as described in the Company SEC Documents, and to the extent consistent therewith, (i) the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business and (ii) each of the Company and its Subsidiaries shall use its reasonable efforts to preserve in all material respects its business organization intact and maintain its existing relations with customers, suppliers, employees and business associates;

(b) the Company will not, directly or indirectly, (i) amend its certificate of incorporation or by-laws; or (ii) split, combine or reclassify the outstanding Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company;

(c) neither the Company nor any of its Subsidiaries shall: (i) other than continuing to pay regular quarterly cash dividends on the Company Common Stock consistent with past practice, declare, set aside or pay any dividend or other

 

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distribution with respect to its capital stock (other than dividends from any of the Company’s Subsidiaries to the Company or any of the Company’s other Subsidiaries); (ii) issue or sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to sell or acquire, any shares of capital stock of any class of the Company or its Subsidiaries, other than shares of Company Common Stock reserved for issuance on the date hereof upon exercise of Rights outstanding on the date hereof and pursuant to the Rights Agreement or issuances pursuant to the exercise of Company Stock Options outstanding on the date hereof; or (iii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock other than redemption pursuant to the Rights Agreement of the Rights outstanding on the date hereof;

(d) neither the Company nor any of its Subsidiaries shall acquire, sell, lease or dispose of any material assets, stock, or other ownership interest in any of its properties or Subsidiaries other than in the ordinary course of business;

(e) the Company shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the assets of any business or any corporation, partnership, joint venture, association or other business organization or division thereof that would be material to the Company and its Subsidiaries, taken as a whole, or (ii) any assets that would be material to the Company and its Subsidiaries taken as a whole, except for purchases in the ordinary course of business;

(f) neither the Company nor any of its Subsidiaries shall, except as contemplated by this Agreement, enter into, adopt or materially amend any employee Benefit Plans or amend any employment or severance agreement or increase in any manner the compensation of any employees, except in the case of any increase in compensation for non-officer employees, for increases in the ordinary course of business consistent with past practice; provided, that nothing herein will be deemed to restrict or prohibit the payment of benefits as they become due and payable;

(g) neither the Company nor any of its Subsidiaries shall: (i) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the material obligations of any other Person (other than Subsidiaries of the Company), except in the ordinary course of business; or (ii) make any material loans, advances or capital contributions to, or investments in, any other Person (other than to Subsidiaries of the Company), other than in the ordinary course of business and other than routine advances to employees;

(h) neither the Company nor any of its Subsidiaries shall materially change any of the accounting methods or practices used by it unless required by GAAP or applicable law;

 

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(i) neither the Company nor any of its Subsidiaries will adopt any plan of complete or partial liquidation, dissolution, restructuring or other reorganization of the Company or any of its Subsidiaries;

(j) neither the Company nor any of its Subsidiaries will settle or compromise any material claim (including arbitration) or material litigation; and

(k) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.

Section 4.2 Access to Information. From the date hereof until the Effective Time, upon reasonable notice, the Company shall (and shall cause each of its Subsidiaries to) afford to the officers, employees, accountants, counsel and other representatives of Parent, access, during normal business hours, and with reasonable advance notice to the Company’s general counsel, to its properties, books and records. All nonpublic information provided to, or obtained by, Parent in connection with the transactions contemplated hereby shall be held in accordance with the terms of the confidentiality agreement, dated as of March 13, 2006, between the Company and Parent (the “Confidentiality Agreement”). Notwithstanding the foregoing, the Company shall not be required to provide any information which (i) it reasonably believes it may not provide to Parent by reason of applicable Law, (ii) which constitutes information protected by attorney/client privilege, or (iii) which the Company or any Subsidiary is required to keep confidential by reason of contract, agreement or understanding with third parties entered into prior to the date hereof, provided, however, that if the Company fails to provide any information pursuant to this sentence, it shall (x) notify Parent that it is declining to provide information in reliance hereon, (y) identify the clause on which it relies in declining to provide such information and (z) describe the subject of the information that is not being provided as extensively as is consistent with its reason hereunder for nondisclosure.

Section 4.3 Employee Benefits.

(a) Parent and Merger Sub agree that, following the Effective Time, until the first anniversary of the Effective Time, the Surviving Corporation and its Subsidiaries and successors shall provide each person who, immediately prior to the Effective Time, was an employee of the Company or its Subsidiaries (an “Employee”) and whose employment is terminated during the first twelve months following the Effective Time with severance payments and severance benefits no less favorable than those available to such Employee immediately prior to the date hereof. Parent and Merger Sub further agree that, following the Effective Time, until the first anniversary of the Effective Time, the Surviving Corporation and its Subsidiaries shall provide each Employee who remains employed by the Surviving Corporation or one of its Subsidiaries with base salary and benefits (other than bonus plans) that are no less favorable in the aggregate than those provided to such Employee immediately prior to the date hereof, and shall permit each such Employee who currently participates in the Executive Incentive Plan to participate in a performance

 

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bonus plan with a target percentage of base salary equal to such Employee’s current target percentage of base salary under the Executive Incentive Plan. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Surviving Corporation and its Subsidiaries shall not provide any form of equity-based compensation to any such Employees, nor shall such form of equity-based compensation be provided by Parent or any Affiliate of Parent.

(b) Parent and Merger Sub shall, or shall cause the Surviving Corporation and its Subsidiaries, to, give each Employee who remains employed by the Surviving Corporation or one of its Subsidiaries following the Effective Time full credit for such Employee’s service with the Company and its Subsidiaries for purposes of eligibility, vesting, and determination of the level of benefits (including, for purposes of vacation and severance), but not for purposes of benefit accruals under defined benefit plans, under any benefit plans made generally available to employees or officers or any class or level of employees or officers maintained by Parent or Merger Sub or the Surviving Corporation and its Subsidiaries in which such Employee participates, to the same extent recognized by the Company under a corresponding benefit plan immediately prior to the date hereof; provided, however, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits with respect to the same period of service.

(c) Following the Effective Time, Parent and Merger Sub shall, or shall cause the Surviving Corporation and its Subsidiaries to, make reasonable efforts to (i) waive any preexisting condition limitations otherwise applicable to Employees who remain employed by the Surviving Corporation or any of its Subsidiaries and their eligible dependents under any plan of Parent or Merger Sub or the Surviving Corporation and its Subsidiaries that provides health benefits in which such Employees may be eligible to participate following the Effective Time other than any limitations that were in effect with respect to such Employees as of the date hereof or at any time prior to the Effective Time under the analogous Company benefit plan, (ii) honor any deductible, co-payment and out-of-pocket maximums incurred by any such Employees and their eligible dependents under the health plans in which they participated immediately prior to the date hereof during the portion of the calendar year prior to the Effective Time in satisfying any deductibles, co-payments or out-of-pocket maximums under health plans of Parent or Merger Sub or the Surviving Corporation and its Subsidiaries in which they are eligible to participate after the Effective Time in the same plan year in which such deductibles, co-payments or out-of-pocket maximums were incurred and (iii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to any such Employee and his or her eligible dependents on or after the Effective Time, in each case to the extent such Employee or eligible dependent had satisfied any similar limitation or requirement under an analogous Company benefit plan prior to the Effective Time.

(d) Pursuant to the terms of the Company’s Executive Incentive Plan (the “Executive Incentive Plan”), following the Effective Time on the Closing Date, the Parent and Merger Sub shall, or shall cause the Surviving

 

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Corporation and its Subsidiaries to, upon receipt of a general release from the applicable Employee waiving all claims under the Executive Incentive Plan and all Company Equity Plans in a form reasonably acceptable to the Company and Parent, pay each Employee who is a participant in the Executive Incentive Plan a cash payment in accordance with the Executive Incentive Plan in respect of any outstanding Cash Based Awards, any outstanding Performance Shares, and any outstanding Performance Units (an “Award”) held by such Employee equal to product of (A) in the case of a Performance Share, the Change of Control Value (as defined in the Executive Incentive Plan), (B) in the case of a Performance Unit, the value of the Performance Unit specified in the applicable agreement governing such Award (the “Award Agreement”), or (C) in the case of a Cash-Based Award, the value of the Cash-Based Award or the value of the Performance Unit specified in the Award Agreement as applicable, multiplied successively by each of the following: (1) the greater of such Employee’s (x) target percentage, if any, specified in Award Agreement or (y) the maximum percentage, if any, that would be earned under the terms of the applicable Award Agreement assuming that the rate at which the performance goals have been achieved as of the Closing Date would continue until the end of the applicable performance period and (2) a fraction, the numerator of which is the number of whole and partial months that have elapsed between the beginning of the applicable performance period and the Closing Date and the denominator of which is the number of whole and partial months in the performance period.

(e) Notwithstanding the foregoing, the provisions of Sections 4.3(a)-(d) shall not apply with respect to any Employee whose employment is governed by any collective bargaining agreement in effect as of the Closing Date.

(f) No provision of this Section 4.3 shall be construed (i) to create a right of any Employee to continued employment by the Surviving Corporation or any of its Subsidiaries following the Effective Time, or (ii) (without limiting the generality of Section 7.6) to create a right in any Employee or beneficiary of any Employee under any benefit plan of the Surviving Corporation or any of its Subsidiaries or Affiliates.

Section 4.4 No Solicitation.

(a) Except as otherwise set forth herein, from the date of this Agreement until the Effective Time, or, if earlier, the termination of this Agreement in accordance with its terms, the Company agrees that it and its Subsidiaries will not, and it will not authorize any of its officers, directors, employees and investment bankers, attorneys, consultants or other agents retained by the Company or any of its Subsidiaries (each, a “Representative”) to, and it will instruct all Representatives of the Company and its Subsidiaries not to, directly or indirectly, (i) solicit, initiate, knowingly facilitate or knowingly encourage any inquiries or the making or submission of any proposal that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (ii) participate or engage in any discussions or negotiations with, or furnish any non-public information to, any third Person relating to an Acquisition

 

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Proposal, (iii) afford access to the properties, books or records of the Company or any of its Subsidiaries to any Person that has made, or to the Company’s Knowledge, is considering making, any Acquisition Proposal, or (iv) enter into any letter of intent or agreement in principle or any agreement or understanding providing for any Acquisition Proposal (except for confidentiality agreements permitted under Section 4.4(b)) or (v) propose publicly or agree to any of the foregoing relating to an Acquisition Proposal. Without limiting the foregoing, it is agreed that any violation of the preceding sentence by a Representative of the Company or any of its Subsidiaries (including as a result of a failure to follow the instructions referred to above) shall be deemed a breach of this Section 4.4(a) by the Company.

(b) Notwithstanding Section 4.4(a), if (i) the Company receives an unsolicited Acquisition Proposal that the Board of Directors of the Company by a majority vote determines in its good faith judgment to be reasonably expected to lead to a Superior Proposal (after consulting with its outside legal and financial advisors), taking into account any revisions to the terms of the Merger or this Agreement proposed by Parent after being notified pursuant to Section 4.4(b)(ii) if such revisions are made during the 2 business day notice period referred to in Section 4.4(b)(ii), and (ii) the Company is not then in breach of this Section 4.4, the Company may, subject to its providing 2 business days’ prior written notice to Parent of the material terms and conditions of such Acquisition Proposal: (x) furnish information to the Person making such Acquisition Proposal pursuant to an executed confidentiality agreement on terms no less restrictive to the Person making the Acquisition Proposal than the terms of the Confidentiality Agreement, provided such information is concurrently furnished to Parent in the same form provided to such Person; and (y) engage in discussions or negotiations with such Person with respect to the Acquisition Proposal. The Company shall promptly (and in no event later than 24 hours after receipt) notify Parent (which notice shall be provided orally and in writing and shall identify the Person making the Acquisition Proposal or request and set forth the material terms thereof) of any Acquisition Proposal or any request for confidential information relating to the Company or any of its Subsidiaries by any Person that has made, or to the Company’s Knowledge intends to make, an Acquisition Proposal, and shall keep Parent fully informed in all material respects of any Superior Proposal, including the status of such Superior Proposal and any material changes (or proposed material changes) to the terms thereof. The Company and its Subsidiaries will, and the Company will cause the Representatives of the Company and its Subsidiaries to, immediately cease and cause to be terminated all discussions and negotiations, if any, that have taken place prior to the date of this Agreement with any parties with respect to any Acquisition Proposal.

(c) Nothing in this Agreement shall prohibit or restrict the Board of Directors, at any time prior to the receipt of the Company Shareholder Approval, from withdrawing, modifying or qualifying the Company Board Recommendation (a “Change of Recommendation”), if (i) the Board of Directors shall have determined in good faith, after consultation with the Company’s outside legal counsel, that the failure of the Board of Directors to effect a Change of

 

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Recommendation would be reasonably likely to result in a breach of the Board of Directors’ fiduciary duties to the Company’s stockholders under applicable Law and (ii) the Company provides Parent written notice of its intention to effect a Change of Recommendation 2 business days prior to effecting a Change of Recommendation.

(d) Nothing contained in this Agreement shall prohibit the Company from taking and disclosing to its stockholders a position as required by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act or from making any such other disclosures that are required by applicable Law, provided that the Company shall not make any disclosure or take any action that represents a Change of Recommendation other than in compliance with Section 4.4(c); provided, that the Company shall not be required to comply with Section 4.4(c)(ii) if (i) upon the advice of the Company’s outside legal counsel, such Change of Recommendation is required by applicable Law to be disclosed sooner than 2 business days prior to effecting a Change of Recommendation, and (ii) the Company provides as much advance written and oral notice as possible to Parent considering such requirements of applicable Law, it being agreed that the Company shall always notify Parent orally and in writing in advance of effecting a Change of Recommendation in order to comply with this proviso.

(e) For the purposes of this Section 4.4,

(i) “Acquisition Proposal” means any bona fide proposal, whether in writing or otherwise, made by a third Person (other than Parent or any of its Subsidiaries) for (i) a merger, reorganization, consolidation or other business combination involving the Company, (ii) the acquisition by any Person of 20% or more of the assets of the Company and its Subsidiaries, taken together as a whole, or (iii) the acquisition by any Person of 20% or more of the outstanding shares of any class of capital stock of the Company or 20% or more of the voting power represented by the outstanding voting securities of the Company; and

(ii) “Superior Proposal” means any bona fide written Acquisition Proposal (provided, that for the purposes of this definition, such proposal shall be for or in respect of at least a majority of the outstanding Shares or all or substantially all of the Company’s and its Subsidiaries’ assets, taken as a whole), (A) that is on terms which the Board of Directors determines in good faith, after consultation with its outside legal counsel and financial adviser, to be more favorable to the Company and its stockholders than the Merger, (B) for which financing, to the extent required, in the good faith reasonable judgment of the Board of Directors, is reasonably capable of being obtained by such Person and (C) the conditions to consummation of which are, in the good faith reasonable judgment of the Board of Directors, reasonably capable of being satisfied.

Section 4.5 Publicity. The initial press release with respect to the execution of this Agreement shall be a joint press release reasonably acceptable to Parent and the Company. Thereafter, so long as this Agreement is in effect, neither the Company,

 

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Parent nor any of their respective Subsidiaries or Affiliates shall issue or cause the publication of any press release or make any public statement with respect to the Merger, this Agreement or the other transactions contemplated hereby without the prior consultation of the other parties, except as may be required by Law or by any listing agreement with the New York Stock Exchange.

Section 4.6 Directors’ and Officers’ Insurance and Indemnification.

(a) From and after the consummation of the Merger, Parent shall, and shall cause the Surviving Corporation to, indemnify, defend and hold harmless any person who is now, or has been at any time prior to the date hereof, or who becomes prior to the Effective Time, an officer, director, employee and agent (the “Indemnified Party”) of the Company and its Subsidiaries against all losses, claims, damages, liabilities, costs and expenses (including attorney’s fees and expenses), judgments, amounts paid in settlement, any such settlement to be with the approval of the indemnifying party (which approval shall not be unreasonably withheld), and fines in connection with any actual or threatened action, suit, claim, proceeding or investigation whether civil, criminal, administrative, or investigative, (each a “Claim”) to the extent that any such Claim is based on, arises out of, or pertains to (i) the fact that such person is or was a director, officer, employee or agent of the Company or any Subsidiaries or is or was serving at the request of the Company or any of its Subsidiaries as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (ii) this Agreement, or any of the transactions contemplated hereby, in each case to the extent that any such Claim pertains to any matter or fact arising, existing, or occurring prior to or at the Effective Time, regardless of whether such Claim is asserted or claimed prior to, at or after the Effective Time, to the full extent permitted under the DGCL or the Company’s certificate of incorporation, by-laws or other indemnification agreements in effect as of the date hereof, including provisions relating to advancement of expenses incurred in the defense of any action or suit. Any Indemnified Party wishing to claim indemnification under this Section 4.6, upon learning of any such claim, action, suit, proceeding or investigation, shall notify Parent, Merger Sub or the Surviving Corporation (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 4.6, except to the extent such failure materially prejudices such party), and shall deliver to Merger Sub and the Surviving Corporation the undertaking contemplated by Section 145(e) of the DGCL. The Indemnified Parties as a group may retain only one law firm to represent them with respect to each such matter unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more Indemnified Parties. In the event any Indemnified Party brings any action against Parent or the Surviving Corporation to enforce rights or to collect monies due under this Section 4.6, the prevailing party in such action shall be entitled to recover its costs, including reasonable attorneys’ fees and costs.

(b) Parent and the Company agree that all rights to indemnification and all limitations or liability existing in favor of any Indemnified Party as provided in the Company’s certificate of incorporation and by-laws as in effect

 

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as of the date hereof shall survive the Merger and shall continue in full force and effect, without any amendment thereto, for a period of six years from the Effective Time; provided, that, in the event any Claim or Claims are asserted or made within such six year period, all rights to indemnification in respect of any such Claim or Claims shall continue until disposition of any and all such Claims; provided, further, that any determination required to be made with respect to whether an Indemnified Party’s conduct complies with the standards set forth under the DGCL, the Company’s certificate of incorporation or by-laws or such agreements, as the case may be, shall be made by independent legal counsel selected by the Indemnified Party and reasonably acceptable to Parent and; provided, further, that nothing in this Section 4.6 shall impair any rights of any present or former directors or officers of the Company.

(c) In the event Parent or Merger Sub 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 or conveys all or substantially all of its properties and assets to any person, then, and in each such case, to the extent necessary to effectuate the purposes of this Section 4.6, proper provision shall be made so that the successors and assigns of Parent or Merger Sub, as applicable, assume the obligations set forth in this Section 4.6 and none of the actions described in clauses (i) or (ii) shall be taken until such provision is made.

(d) Parent or the Surviving Corporation shall maintain the Company’s existing officers’ and directors’ liability insurance policy (“D&O Insurance”) for a period of not less than six years after the Effective Date; provided, that the Parent may substitute therefor policies of substantially similar coverage and amounts containing terms no less advantageous to such former directors or officers; provided, further, that notwithstanding the foregoing, in no event shall Parent or the Surviving Corporation be required to pay in any one year aggregate premiums for D&O Insurance under this Section 4.6 in excess of 200% of the aggregate premiums paid by the Company in fiscal 2005 for such purposes. In the event that, in any one year, the aggregate premiums for D&O Insurance exceed 200% of the aggregate premiums paid by the Company in fiscal 2005 for such purposes, Parent or the Surviving Corporation shall purchase the highest level of D&O Insurance coverage available for 200% of the aggregate premiums paid by the Company in fiscal 2005.

(e) This Section 4.6 will survive the consummation of the Merger and shall be binding on all successors and assigns of the Surviving Corporation and shall be enforceable by all Indemnified Parties.

Section 4.7 Stockholder Meeting; Proxy.

(a) The Company will, in accordance with applicable Law and its certificate of incorporation and bylaws:

 

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(i) duly call, give notice of, convene and hold a special meeting of its stockholders (the “Special Meeting”) for the purposes of considering the adoption and approval of this Agreement and the Merger (the “Company Stockholder Approval”) as soon as practicable following the date hereof; and

(ii) prepare and file with the SEC, as soon as reasonably practicable (but in no event later than 15 days after the date hereof), a preliminary proxy statement relating to the Merger and this Agreement and use its reasonable efforts (x) to obtain and furnish the information required to be included by the federal securities laws (and the rules and regulations thereunder) in the Proxy Statement (as hereinafter defined) and, after consultation with Parent, to respond promptly to any comments made by the SEC with respect to the preliminary proxy statement and, as soon as practicable thereafter, to cause a definitive proxy statement (the “Proxy Statement”) to be mailed to its stockholders and (y) to obtain the necessary approvals of the Merger and this Agreement by its stockholders as soon as practicable.

(b) Subject to Section 4.4(c), the Company will, through the Board of Directors, recommend that the stockholders of the Company vote in favor of the adoption of this Agreement and approval of the Merger (the “Company Board Recommendation”) and include such recommendation in the Proxy Statement.

(c) Parent agrees that it will provide the Company with the information concerning Parent and Merger Sub required to be included in the Proxy Statement and will vote, or cause to be voted, all of the Shares then owned by it, Merger Sub or any of its other Subsidiaries and Affiliates in favor of the approval of the Merger and the adoption of this Agreement.

Section 4.8 Approvals and Consents; Cooperation; Notification.

(a) Each of the Company, Parent and Merger Sub shall: (i) promptly make and effect all registrations, filings and submissions required to be made or effected by it pursuant to the HSR Act, Foreign Antitrust Laws, the Exchange Act and other applicable Governmental Entity with respect to the Merger; and (ii) use its reasonable efforts to cause to be taken, on a timely basis, all actions necessary or appropriate for the purpose of consummating and effectuating the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, each of the Company, Parent and Merger Sub will (A) as promptly as practicable (and in any event within 10 days of the date hereof with respect to the HSR Act and within 20 days of the date hereof with respect to the EC Merger Regulation (or any similar laws of any EC member states, as applicable)) file (1) any Notification and Report Forms and related material that it may be required to file with the U.S. Federal Trade Commission (the “FTC”), the U.S. Department of Justice (the “DOJ”) under the HSR Act and (2) any forms, registrations, notices, filings and documents of any other applicable Governmental Entity, to the extent required by applicable Law, (B) promptly provide all information requested by the FTC, DOJ or any Governmental Entity in connection

 

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with the Merger or any of the other transactions contemplated by this Agreement, and (C) shall use its reasonable efforts to promptly take, and cause its Affiliates to promptly take all actions and steps necessary to obtain any clearance or approval required to be obtained from the FTC, DOJ, any foreign competition authority or any other Governmental Entity in connection with the transactions contemplated by this Agreement.

(b) Each party hereto shall (i) give the other parties prompt notice upon obtaining knowledge of the making or commencement of any request, inquiry, investigation, action or Legal Proceeding (as defined below) by or before any Governmental Entity with respect to the Merger or any of the other transactions contemplated by this Agreement, (ii) keep the other parties informed as to the status of any such request, inquiry, action, claim, suit, action or legal, governmental, administrative, arbitration or other alternative dispute resolution proceeding or investigation (collectively, “Legal Proceedings”), and (iii) promptly inform the other parties of any communication to or from the FTC, DOJ or any other Governmental Entity regarding the Merger or Parent’s ownership or operation of the Company or its business following the consummation of the transactions contemplated by this Agreement. Each party hereto will consult and cooperate with the other parties and will consider in good faith the views of the other parties in connection with any analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted in connection with any such request, inquiry, investigation, action or Legal Proceeding. In addition, except as may be prohibited by any Governmental Entity or by any Legal Requirement, each party hereto will permit authorized representatives of the other parties to be present at each meeting or conference with representatives of any Governmental Entity relating to any such request, inquiry, investigation, action or Legal Proceeding and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any Governmental Entity in connection with any such request, inquiry, investigation, action or Legal Proceeding.

(c) Notwithstanding subsections (a) and (b) of this Section 4.8 or any other provision of this Agreement (including Section 4.9) to the contrary, in no event shall Parent or Merger Sub or any of their Affiliates be required to agree to (i) any prohibition of or limitation on the ownership or operation by Parent, Merger Sub, the Company or any of their respective Subsidiaries or Affiliates of any portion of their respective businesses or assets, (ii) divest, hold separate or otherwise dispose of any portion of its or their respective businesses or assets or (iii) any limitation on the ability of Parent, Merger Sub, the Company or any of their respective Subsidiaries, as the case may be, to acquire or hold, or exercise full rights of ownership of, the Company Common Stock and any capital stock of any Subsidiary of the Company, or (iv) any other limitation on Parent’s, Merger Sub’s, the Company’s or any of their respective Subsidiaries’ or Affiliates’ ability to effectively control their respective businesses or operations (any such requirement under clauses (i)-(iv), an “Antitrust Order”), except, in the case of clauses (i), (ii) and (iv) of this Section 4.8(c), for a disposition of, or limitation on the ownership, operation or control of, any stand-alone facility or stand-alone operation of the Company or any of its Subsidiaries that accounts for less than 5% of the annual net sales of the Company for 2005.

 

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(d) Each of the Company and Parent shall give prompt notice to the other of the occurrence or failure to occur of an event that would, or, with the lapse of time would, cause any condition to the consummation of the Merger not to be satisfied. The Company will as promptly as reasonably practicable notify Parent of (A) the occurrence of any Company Material Adverse Effect, (B) any notice or other communication from any Person alleging that the consent of such Person (or another Person) is or may be required in connection with the transaction contemplated by this Agreement, and (C) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement. Each of Parent and Merger Sub will as promptly as is reasonably practicable notify the Company of (A) the occurrence of any Parent Material Adverse Effect, (B) any notice or other communication from any Person alleging that the consent of such Person (or another Person) is or may be required in connection with the transaction contemplated by this Agreement, and (C) any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement. Notwithstanding the foregoing, the provision of notice pursuant to this Section 4.8(d) shall not affect the representations or warranties of any party or the conditions or obligations of any party hereunder.

Section 4.9 Reasonable Efforts; Further Assurances. Subject to the terms and conditions of this Agreement including, without limitation, provisions expressly acknowledging and permitting the Board to act consistently with its fiduciary duties, each of Parent and the Company shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate and make effective, as soon as practicable after the date of this Agreement, the transactions contemplated hereby, including, without limitation, using all reasonable efforts to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated hereby and using all reasonable efforts to defend any litigation seeking to enjoin, prevent or delay the consummation of the transactions contemplated hereby or seeking material damages. At and after the Effective Time, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Sub, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

Section 4.10 Merger Sub. Parent will take all action necessary to (a) cause Merger Sub to perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement and in accordance with the DGCL as promptly as is reasonably practicable following the execution of this Agreement and (b) to ensure that, prior to the Effective Time, Merger Sub will not conduct any business or make any investments other than as expressly contemplated by this Agreement.

 

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ARTICLE V

CONDITIONS

Section 5.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligation of each party to effect the Merger will be subject to the satisfaction, or, to the extent permitted by Law, waiver by Parent and the Company, at or prior to the Effective Time of the following conditions:

(a) this Agreement and the Merger shall have been approved and adopted by the requisite vote of the stockholders of the Company in accordance with the DGCL and the Company’s certificate of incorporation;

(b) no statute, rule, regulation, order, or decree and no injunction has been entered, enacted, promulgated or issued by any Governmental Entity or court which prohibits the consummation of the Merger; provided, however, that prior to invoking this provision, each party will use its reasonable efforts to prevent such entry; and

(c) (i) the waiting period under the HSR Act applicable to the Merger shall have expired or been terminated and (ii) all other governmental antitrust and/or competition consents, orders, approvals and waiting periods which are required or deemed necessary by Parent in its good faith reasonable judgment (including, without limitation, in order to avoid any Antitrust Orders which are reasonably foreseeable at the time all other closing conditions have been satisfied) for or in connection with the consummation of the Merger and the other transactions contemplated hereby shall have been obtained and shall be in effect, or, with respect to waiting periods, shall have expired or been terminated, at the Effective Time.

Section 5.2 Conditions to Obligation of the Company to Effect the Merger. The obligation of the Company to effect the Merger is further subject to the satisfaction, or, to the extent permitted by Law, waiver by the Company, of the following conditions:

(a) (i) the representations and warranties of Parent and Merger Sub set forth in this Agreement that are qualified by a “Material Adverse Effect” qualification shall be true in all respects as so qualified when made and at and as of the Effective Time as if made at and as of such time (provided that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date), and (ii) the representations and warranties of Parent and Merger Sub set forth in this Agreement that are not qualified by a “Material Adverse Effect” qualification shall be true in all respects when made and at and as of the

 

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Effective Time as if made at and as of such time (provided that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date), except for failures to be so true and correct which would not, individually or in the aggregate, have a Parent Material Adverse Effect;

(b) Parent shall have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time; and

(c) Parent shall have delivered to the Company a certificate, dated the Effective Time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that the conditions set forth in Section 5.2(a) and Section 5.2(b) have been satisfied.

Section 5.3 Condition to Obligations of Parent and Merger Sub. The obligation of Parent and Merger Sub to effect the Merger is further subject to the satisfaction, or, to the extent permitted by Law, waiver by Parent and Merger Sub, of the following conditions:

(a) (i) the representations and warranties of the Company set forth in this Agreement that are qualified by a “Material Adverse Effect” qualification shall be true in all respects as so qualified when made and at and as of the Effective Time as if made at and as of such time (provided that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date), and (ii) the representations and warranties of the Company set forth in this Agreement that are not qualified by a “Material Adverse Effect” qualification shall be true in all respects when made and at and as of the Effective Time as if made at and as of such time (provided that the accuracy of representations and warranties that by their terms speak as of a specified date will be determined as of such date), except for failures to be so true and correct which would not, individually or in the aggregate, have a Company Material Adverse Effect;

(b) the Company shall have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time; and

(c) the Company shall have delivered to Parent a certificate, dated the Effective Time and signed by its Chief Executive Officer and Chief Financial Officer, certifying to the effect that the conditions set forth in Section 5.3(a) and Section 5.3(b) have been satisfied.

 

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ARTICLE VI

TERMINATION

Section 6.1 Termination. This Agreement may be terminated and the Merger contemplated herein may be abandoned at any time prior to the Effective Time, whether before or after stockholder approval thereof:

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

(b) by either of the Company, on the one hand, or Parent and Merger Sub, on the other hand:

(i) if the Effective Time should not have occurred on or prior to September 30, 2006 (the “Termination Date”); provided, however, that if the condition to Closing set forth in Section 5.1(c)(ii) shall not have been satisfied or waived prior to such date, the Termination Date shall automatically be extended until October 31, 2006 (in such event, such later date being hereinafter referred to as the Termination Date); provided, further, that the right to terminate this Agreement under this Section 6.1(b)(i) will not be available to any party whose willful breach of any representation or warranty in this Agreement, or whose other action or failure to act, has been the cause of, or resulted in, the failure of the Company or Merger Sub to consummate the Merger on or before the Termination Date;

(ii) if any Governmental Entity has issued an order, decree or ruling or taken any other action (which order, decree, ruling or other action Parent and Merger Sub hereto will use their reasonable efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement or prohibiting Parent to acquire or hold or exercise rights of ownership of the Shares, and such order, decree, ruling or other action shall have become final and non-appealable (any such order, decree, ruling or other action, a “Final Order”); or

(iii) if the Special Meeting (including any adjournment or postponement thereof) has concluded, the Company’s stockholders have voted and the Company Stockholder Approval has not been obtained;

(c) by the Company, if, prior to obtaining the Company Stockholder Approval, the Board of Directors authorizes the Company, subject to complying with the terms of this Agreement, to enter into a binding written agreement concerning a transaction that constitutes a Superior Proposal; provided, that for the termination to be effective under this subsection, the Company shall have paid the Termination Fee in accordance with Section 6.3 of this Agreement;

 

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(d) by Parent and Merger Sub, if prior to the Company Stockholder Approval, (i) the Board of Directors shall have effected a Change of Recommendation in a manner adverse to Parent or shall have recommended another Acquisition Proposal or (ii) the Special Meeting shall not have been called or held (subject to any adjournment or postponement thereof which is reasonably necessary to facilitate the consummation of the transactions contemplated hereby and which will not, in any event, exceed 20 days) as required by Section 4.7 within 10 business days after written notice of the failure to comply with Section 4.7 shall have been received by the Company from Parent;

(e) by the Company, (i) if Parent or Merger Sub shall have breached any of their representations, warranties, covenants or agreements set forth in this Agreement or (ii) if any of Parent’s or Merger Sub’s representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of the conditions set forth in Section 5.2(a) and Section 5.2(b); provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 30 days after written notice thereof shall have been received by Parent; or

(f) by Parent, (i) if the Company shall have breached any of its representations, warranties, covenants or agreements set forth in this Agreement or (ii) if any of the Company’s representations or warranties shall have become untrue, which, in the case of either clause (i) or (ii), would result in the failure of the conditions set forth in Section 5.3(a) and Section 5.3(b); provided, that any such breach shall be incapable of being cured or shall not have been cured in all material respects within 30 days after written notice thereof shall have been received by the Company.

Section 6.2 Effect of Termination. In the event of the termination of this Agreement as provided in Section 6.1, this Agreement shall become null and void and of no force and effect, and there will be no liability on the part of Parent, Merger Sub or the Company (or their respective directors, officers, employees, stockholders, representatives, agents or advisors) to the other parties hereto, except for any liability arising out of a willful breach of this Agreement or as provided for in the Confidentiality Agreement, in which case the aggrieved party shall be entitled to all rights and remedies available at Law or in equity. Notwithstanding the foregoing, the provisions of Section 6.2, Section 6.3, Article VII and the confidentiality obligations of Section 4.2 shall survive any termination hereof.

Section 6.3 Termination Fee.

(a) Notwithstanding any provision in this Agreement to the contrary, in the event that (i) this Agreement is terminated by the Company pursuant to Section 6.1(c), (ii) this Agreement is terminated by Parent pursuant to Section 6.1(d)(i), (iii) this Agreement is terminated by Parent pursuant to Section 6.1(d)(ii) and within one year of termination of this Agreement, the Company consummates an Acquisition Proposal, or (iv) an Acquisition Proposal shall have been made known to the Company or shall have been made directly to its stockholders generally or any person shall have publicly announced an intention (whether or not conditional) to make an Acquisition

 

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Proposal and thereafter this Agreement is terminated pursuant to Section 6.1(b)(i) or Section 6.1(b)(iii) and such Acquisition Proposal (whether or not modified after it was first made) is consummated within 1 year of such termination, then the Company shall pay to Parent, (x) in the case of clauses (i) or (ii) of this Section 6.3(a), upon the date of termination, or (y) in the case of clauses (iii) or (iv) of this Section 6.3(a), upon such consummation, a fee of $22,000,000 (the “Termination Fee”) by wire transfer of immediately available funds.

(b) Notwithstanding anything to the contrary in this Agreement, Parent’s right to receive payment of the Termination Fee pursuant to Section 6.3(a) shall be the exclusive remedy of Parent and Merger Sub against the Company, its Subsidiaries or any of their respective Representatives for any loss suffered as a result of a termination of this Agreement as provided for in this Section 6.3, and upon payment of the Termination Fee in accordance with this Section 6.3 neither the Company, its Subsidiaries, nor any of their respective Representatives, as the case may be, shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement (except as provided in Section 6.2).

ARTICLE VII

MISCELLANEOUS

Section 7.1 Amendment and Modification. Subject to applicable Law, this Agreement may be amended, modified and supplemented in any and all respects, whether before or after any vote of the stockholders of the Company contemplated hereby, by written agreement of the parties hereto, by action taken by their respective Boards of Directors, at any time prior to the Closing Date with respect to any of the terms contained herein; provided, however, that after the approval of this Agreement by the Company’s stockholders, no such amendment, modification or supplement will reduce or change the Merger Consideration or adversely affect the rights of the Company’s stockholders hereunder without the approval of such stockholders; provided, further, however, that after any adoption of this Agreement by the Company’s stockholders, no amendment will be made which by law requires further approval of the Company’s stockholders without the further approval of such stockholders

Section 7.2 Nonsurvival of Representations and Warranties. None of the representations and warranties of the Company contained in this Agreement, or contained in any certificate delivered in connection with any of the transactions contemplated by this Agreement, will survive the Effective Time. This Section 7.2 will not limit any covenant or agreement contained in this Agreement which by its terms contemplates performance after the Effective Time

Section 7.3 Notices. All notices and other communications hereunder will be in writing and will be deemed given if delivered personally, telecopied (which is

 

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confirmed) or sent by an overnight courier service (providing proof of delivery), such as Federal Express, to the parties at the following addresses (or at such other address for a party as will be specified by like notice):

 

(a)   if to Parent or Merger Sub, to:
  Berkshire Hathaway Inc.
  1440 Kiewit Plaza
  Omaha, Nebraska 68131
  Telephone: (402) 346-1400
  Telecopy: (402) 346-3375
  Attention: Marc D. Hamburg,
  Vice President and Chief Financial Officer
  with a copy to:
  Munger, Tolles & Olson LLP
  355 South Grand Avenue
  35th Floor
  Los Angeles, California 90071-1560
  Telephone: (213) 683-9100
  Telecopy: (213) 687-3702
  Attention: Robert Denham
  Mary Ann Todd
(b)   if to the Company, to:
  Russell Corporation
  3330 Cumberland Blvd, Suite 800
  Atlanta, Georgia 30339
  Telephone: (678) 742-8000
  Telecopy: (678) 742-8514
  Attention: Floyd G. Hoffman
  Senior Vice President, Corporate Development,
  General Counsel and Secretary
  with a copy to:
  Skadden, Arps, Slate, Meagher & Flom LLP
  4 Times Square
  New York, New York 10036-6522
  Telephone: (212) 735-3000
  Telecopy: (212) 735-2000
  Attention: Nancy A. Lieberman
                    Allison R. Schneirov

 

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Section 7.4 Other Defined Terms; Interpretation.

(a) For the purposes of this Agreement,

(i) “Entity” means any corporation (including any non-profit corporation) general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society or other enterprise, association, organization or entity (including any Governmental Entity);

(ii) “Knowledge” means with respect to the Company and Parent, the actual knowledge of any executive officer of the Company or Parent, as the case may be; and

(iii) “Person” means any individual or Entity.

(b) The definitions contained herein shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun will include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections, Exhibits and Annexes will be deemed to be references to Articles and Sections of, and Exhibits and Annexes to, this Agreement unless the context otherwise requires. All Exhibits and Annexes attached hereto will be deemed incorporated herein as if set forth in full herein and, unless otherwise defined therein, all terms used in any Exhibit or Annex will have the meaning ascribed to such term in this Agreement. The words “include,” “includes” and “including” will be deemed to be followed by the phrase “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise expressly provided herein, any statute referred to herein means such statute as from time to time amended, modified or supplemented. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

Section 7.5 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

Section 7.6 Entire Agreement; Third Party Beneficiaries. This Agreement and the Confidentiality Agreement (including the documents and the instruments referred to herein and therein) (a) constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the

 

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parties, or any of them, with respect to the subject matter hereof and thereof and (b) except for (i) the rights of the Company’s stockholders to receive the Merger Consideration at the Effective Time in accordance with Section 1.7, (ii) the right of the Company, on behalf of its stockholders, to pursue damages in the event of Parent’s or Merger Sub’s intentional breach of this Agreement or fraud, which right is hereby acknowledged and agreed by Parent and Merger Sub, and (iii) as provided in Section 4.6 (which is intended for the benefit of the Company’s former and current officers, directors, employees and other indemnitees, all of whom shall be third party beneficiaries of this provision), are not intended to confer upon any person other than the parties hereto any rights or remedies hereunder.

Section 7.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions of this Agreement will remain in full force and effect and will in no way be affected, impaired or invalidated.

Section 7.8 Governing Law; Jurisdiction. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law thereof or of any other jurisdiction. In any action among or between any of the parties arising out of or relating to this Agreement, each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the Court of Chancery of the State of Delaware and irrevocably and unconditionally consents to service of process in any such action by notice in accordance with Section 7.3.

Section 7.9 Specific Performance. Each of the parties hereto acknowledges and agrees that in the event of any breach of this Agreement, each non-breaching party would be irreparably and immediately harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto (a) will waive, in any action for specific performance, the defense of adequacy of a remedy at law and (b) will be entitled, in addition to any other remedy to which they may be entitled at law or in equity, to compel specific performance of this Agreement in any action instituted in a court of competent jurisdiction.

Section 7.10 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Parent may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder (other than its obligations under Section 1.8(a) hereof) to (a) Fruit of the Loom, Inc. (“Fruit”) or (b) to any other direct or indirect wholly owned Subsidiary of Parent; provided, that, in such case, Parent will cause Fruit to guarantee the performance by any such direct or indirect wholly owned Subsidiary of Parent’s obligations hereunder. 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 permitted successors and assigns.

 

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Section 7.11 Expenses. All costs and expenses incurred in connection with the Merger, this Agreement and the consummation of the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not the Merger is consummated.

Section 7.12 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the parties only, and will be given no substantive or interpretative effect whatsoever.

Section 7.13 Waivers. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition will not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

Section 7.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.15 Obligation of Parent. Parent will cause Merger Sub to duly perform, satisfy and discharge on a timely basis each of the covenants, obligations and liabilities of Merger Sub under this Agreement. Parent agrees to unconditionally guarantee the obligations of Merger Sub pursuant to or arising out of this Agreement.

 

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

 

RUSSELL CORPORATION
By:  

/s/ Floyd G. Hoffman

Name:   Floyd G. Hoffman
Title:   Senior Vice President, Corporate Development, General Counsel and Secretary
BERKSHIRE HATHAWAY INC.
By:  

/s/ Marc D. Hamburg

Name:   Marc D. Hamburg
Title:   Vice President and Chief Financial Officer
F SUBSIDIARY, INC.
By:  

/s/ Marc D. Hamburg

Name:   Marc D. Hamburg
Title:   President

 

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