AGREEMENT AND PLAN OF MERGER by and among BERKSHIRE HATHAWAY INC. OHIO MERGER SUB, INC. and THE LUBRIZOL CORPORATION dated as of March 13, 2011
Exhibit 10.1
EXECUTION VERSION
by and among
OHIO MERGER SUB, INC.
and
THE LUBRIZOL CORPORATION
dated as of
March 13, 2011
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 |
1 | |||
Section 1.4 Effect of the Merger |
2 | |||
Section 1.5 Articles of Incorporation and Code of Regulations of the Surviving Corporation |
2 | |||
Section 1.6 Directors and Officers of the Surviving Corporation |
2 | |||
Section 1.7 Subsequent Actions |
2 | |||
ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK |
2 | |||
Section 2.1 Conversion of Securities |
2 | |||
Section 2.2 Payment; Surrender of Shares; Stock Transfer Books |
3 | |||
Section 2.3 Treatment of Stock Plans |
5 | |||
Section 2.4 Dissenting Shares |
6 | |||
Section 2.5 Adjustments |
7 | |||
Section 2.6 Lost Certificates |
7 | |||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
7 | |||
Section 3.1 Organization |
8 | |||
Section 3.2 Authorization; Validity of Agreement; Company Action |
8 | |||
Section 3.3 Consents and Approvals; No Violations |
9 | |||
Section 3.4 Capitalization |
10 | |||
Section 3.5 SEC Reports and Financial Statements |
11 | |||
Section 3.6 Absence of Certain Changes |
12 | |||
Section 3.7 No Undisclosed Material Liabilities |
13 | |||
Section 3.8 Compliance with Laws and Court Orders |
13 | |||
Section 3.9 Material Contracts |
14 | |||
Section 3.10 Information in Proxy Statement |
14 | |||
Section 3.11 Litigation |
15 | |||
Section 3.12 Employee Compensation and Benefit Plans; ERISA |
15 | |||
Section 3.13 Properties |
16 | |||
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TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 3.14 Intellectual Property |
17 | |||
Section 3.15 Environmental Laws |
17 | |||
Section 3.16 Taxes |
18 | |||
Section 3.17 Opinions of Financial Advisors |
18 | |||
Section 3.18 Brokers or Finders |
19 | |||
Section 3.19 State Takeover Statutes |
19 | |||
Section 3.20 Transactions with Affiliates |
19 | |||
Section 3.21 No Other Representations or Warranties |
19 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
19 | |||
Section 4.1 Organization |
19 | |||
Section 4.2 Authorization; Validity of Agreement; Necessary Action |
19 | |||
Section 4.3 Consents and Approvals; No Violations |
20 | |||
Section 4.4 Ownership of Common Stock |
21 | |||
Section 4.5 Information in Proxy Statement |
21 | |||
Section 4.6 Financing |
21 | |||
Section 4.7 No Prior Activities |
21 | |||
Section 4.8 Litigation |
21 | |||
Section 4.9 Disclaimer of Warranties |
21 | |||
ARTICLE V COVENANTS |
22 | |||
Section 5.1 Interim Operations of the Company |
22 | |||
Section 5.2 No Solicitation by the Company |
24 | |||
ARTICLE VI ADDITIONAL AGREEMENTS |
26 | |||
Section 6.1 Preparation of Proxy Statement |
26 | |||
Section 6.2 Shareholders Meeting |
26 | |||
Section 6.3 Reasonable Best Efforts |
27 | |||
Section 6.4 Notification of Certain Matters |
29 | |||
Section 6.5 Access; Confidentiality |
29 | |||
Section 6.6 Publicity |
29 | |||
Section 6.7 Indemnification |
30 | |||
Section 6.8
Merger Sub Compliance |
31 | |||
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TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 6.9 Employee Matters |
31 | |||
ARTICLE VII CONDITIONS |
32 | |||
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger |
32 | |||
Section 7.2 Conditions to Obligations of Parent and Merger Sub |
33 | |||
Section 7.3 Conditions to Obligations of the Company |
34 | |||
Section 7.4 Frustration of Closing Conditions |
34 | |||
ARTICLE VIII TERMINATION |
34 | |||
Section 8.1 Termination |
34 | |||
Section 8.2 Effect of Termination |
36 | |||
ARTICLE IX MISCELLANEOUS |
37 | |||
Section 9.1 Amendment and Waivers |
37 | |||
Section 9.2 Non-survival of Representations and Warranties |
37 | |||
Section 9.3 Expenses |
37 | |||
Section 9.4 Notices |
37 | |||
Section 9.5 Counterparts |
38 | |||
Section 9.6 Entire Agreement; No Third Party Beneficiaries |
38 | |||
Section 9.7 Severability |
39 | |||
Section 9.8 Governing Law |
39 | |||
Section 9.9 Assignment |
39 | |||
Section 9.10 Consent to Jurisdiction |
39 | |||
Section 9.11 Specific Enforcement |
39 | |||
Section 9.12 WAIVER OF JURY TRIAL |
40 | |||
ARTICLE X DEFINITIONS; INTERPRETATION |
40 | |||
Section 10.1 Cross References |
40 | |||
Section 10.2 Certain Terms Defined |
41 | |||
Section 10.3 Other Definitional and Interpretative Provisions |
45 | |||
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AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of March 13, 2011, by and among
Berkshire Hathaway Inc., a Delaware corporation (“Parent”), Ohio Merger Sub, Inc., an Ohio
corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and The Lubrizol Corporation,
an Ohio corporation (the “Company”).
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company each have
approved, and in the case of the Company and Merger Sub deem it advisable and in the best interests
of their respective shareholders to consummate, the acquisition of the Company by Parent by means
of a merger of Merger Sub with and into the Company upon the terms and subject to the conditions
set forth in this Agreement, whereby each issued and outstanding share of the Company’s Common
Stock (such issued and outstanding shares of the Company’s Common Stock, collectively, the
“Shares”), other than Dissenting Shares, Shares owned by Parent or any wholly-owned Subsidiaries of
Parent, and any shares of Common Stock held in the treasury of the Company, will be converted into
the right to receive the Merger Consideration.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements set forth in this Agreement, the receipt and sufficiency of which are
hereby acknowledged, upon the terms and subject to the conditions of this Agreement, the parties to
this Agreement agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions of this
Agreement and in accordance with Ohio Law, at the Effective Time, Merger Sub will be merged with
and into the Company (the “Merger”), the separate corporate existence of Merger Sub will cease, and
the Company will continue as the surviving corporation. The Company as the surviving corporation
after the Merger is referred to in this Agreement as the “Surviving Corporation.”
Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at
10:00 a.m. on the second Business Day after the satisfaction or waiver of all of the conditions
(other than any condition that by its nature cannot be satisfied until the Closing, but subject to
satisfaction of any such condition) set forth in Article VII (the “Closing Date”), at the
offices of Xxxxx Day, North Point, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, unless another date
or place is agreed to in writing by the parties to this Agreement.
Section 1.3 Effective Time. The parties to this Agreement shall cause the Merger to
be consummated by filing a certificate of merger (the “Certificate of Merger”) on the Closing Date
(or on such other date as Parent and the Company may agree in writing) with the Secretary of State
of the State of Ohio, in such form as required by, and executed in accordance with, the
relevant provisions of Ohio Law (the date and time of the filing of the Certificate of Merger with the
Secretary of State of the State of Ohio, or such later time as is specified in the Certificate of
Merger and as is agreed to by Parent and the Company in writing, being the “Effective Time”).
Section 1.4 Effect of the Merger. The Merger shall have the effects set forth in the
applicable provisions of Ohio Law. Without limiting the generality of the foregoing and subject
thereto, at the Effective Time, all the property, rights, privileges, immunities, powers,
franchises and authority of the Company and Merger Sub shall vest in the Surviving Corporation and
all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities
and duties of the Surviving Corporation.
Section 1.5 Articles of Incorporation and Code of Regulations of the Surviving
Corporation. At the Effective Time, the articles of incorporation and code of regulations of
the Company, as in effect immediately prior to the Effective Time, shall be amended and restated as
of the Effective Time to be in the form of (except with respect to the name of the Company) the
articles of incorporation and code of regulations of Merger Sub, and as so amended shall be the
articles of incorporation and code of regulations of the Surviving Corporation until thereafter
amended as provided therein or by applicable Law (and subject to Section 6.7 hereof).
Section 1.6 Directors and Officers of the Surviving Corporation. The directors of
Merger Sub immediately before the Effective Time will be the initial directors of the Surviving
Corporation and the officers of the Company immediately before the Effective Time will be the
initial officers of the Surviving Corporation, in each case until their successors are duly elected
or appointed and qualified or until their earlier death, resignation or removal in accordance with
the articles of incorporation and the code of regulations of the Surviving Corporation.
Section 1.7 Subsequent Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation, its right, title or interest in, to or under any
of the rights, properties or assets of either of the Company or Merger Sub vested in or to be
vested in the Surviving Corporation as a result of, or in connection with, the Merger or otherwise
to carry out this Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of either the Company or Merger Sub,
all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Corporation or otherwise to carry out
this Agreement.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
Section 2.1 Conversion of Securities. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Merger Sub, the Company or the holders of Shares or
securities of Parent or Merger Sub:
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(a) Each Share issued and outstanding immediately before the Effective Time (other than any
Shares to be cancelled pursuant to Section 2.1(b) and any Dissenting Shares) will be
cancelled and extinguished and be converted into the right to receive $135.00 in cash payable to
the holder of such Share, without interest (the “Merger Consideration”), upon surrender of either
certificates formerly representing such Shares (“Certificates”) or any book-entry Shares
(“Book-Entry Shares”) in the manner provided in Section 2.2. All such Shares, when so
converted, will no longer be outstanding and will be automatically cancelled, retired and cease to
exist. Each holder of Certificates or Book-Entry Shares will cease to have any rights with respect
to such Shares, except the right to receive the Merger Consideration for such Shares upon the
surrender of such Certificate or Book-Entry Share in accordance with Section 2.2, without
interest.
(b) Each share held in the treasury of the Company and each Share owned by Parent or any
direct or indirect wholly-owned Subsidiary of Parent immediately before the Effective Time will be
cancelled and extinguished, and no payment or other consideration will be made with respect to such
shares.
(c) Each share of common stock, par value $0.01 per share, of Merger Sub issued and
outstanding immediately before the Effective Time will thereafter represent one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
Section 2.2 Payment; Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, Merger Sub shall designate the Company’s transfer agent or
another bank or trust company reasonably acceptable to the Company to act as agent for the holders
of Shares in connection with the Merger (the “Paying Agent”) to receive the funds necessary to make
the payments contemplated by Section 2.1(a). When and as needed, Parent or Merger Sub
shall deposit, or cause to be deposited, in trust with the Paying Agent in a separate account for
the benefit of holders of Shares (the “Payment Fund”) the aggregate Merger Consideration to which
such holders shall be entitled at the Effective Time pursuant to Section 2.1(a). If for
any reason the cash in the Payment Fund shall be insufficient to fully satisfy all of
the payment obligations to be made in cash by the Paying Agent hereunder, Parent shall
promptly deposit cash into the Payment Fund in an amount which is equal to the deficiency in the
amount of cash required to fully satisfy such cash payment obligations.
(b) As soon as reasonably practicable after the Effective Time and in any event not later than
three Business Days following the Effective Time, Parent shall cause the Paying Agent to mail to
each holder of record of Certificates or Book-Entry Shares whose Shares were converted into the
right to receive the Merger Consideration pursuant to Section 2.1(a) (i) a letter of
transmittal (which must specify that delivery will be effected, and risk of loss and title to the
Certificates or Book-Entry Shares will pass, only upon delivery of the Certificates to the Paying
Agent or, in the case of Book-Entry Shares, upon adherence to the procedures set forth in the
letter of transmittal, and will be in such form and have such other provisions as the Company and
Merger Sub may reasonably specify) and (ii) instructions for surrendering Certificates or
Book-Entry Shares in exchange for the Merger Consideration. Each holder of Certificates or
Book-Entry Shares may thereafter until the first anniversary of the Effective Time surrender such
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Certificates or Book-Entry Shares to the Paying Agent under cover of the letter of transmittal, as
agent for such holder. Upon delivery of a valid letter of transmittal and the surrender of
Certificates or Book-Entry Shares on or before the first anniversary of the Effective Time, Merger
Sub shall cause the Paying Agent to pay the holder of such Certificates or Book-Entry Shares, in
exchange for the Certificates or Book-Entry Shares, cash in an amount equal to the Merger
Consideration multiplied by the number of Shares represented by such Certificates or Book-Entry
Shares. Until so surrendered, Certificates (other than Certificates representing Dissenting
Shares, Shares held by Parent or any direct or indirect wholly-owned Subsidiary of Parent, and
shares held in the treasury of the Company) or Book-Entry Shares will represent solely the right to
receive the aggregate Merger Consideration relating to the Shares represented by such Certificates
or Book-Entry Shares.
(c) If payment of the Merger Consideration in respect of cancelled Shares is to be made to a
Person other than the Person in whose name surrendered Certificates are registered, it will be a
condition to such payment that the Certificates so surrendered will be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such payment shall have
paid any transfer and other Taxes required by reason of such payment in a name other than that of
the registered holder of the Certificates surrendered or shall have established to the satisfaction
of the Paying Agent that such Tax is not applicable. The Merger Consideration paid upon the
surrender for exchange of Certificates in accordance with the terms of this Article II will
be deemed to have been paid in full satisfaction of all rights pertaining to the Shares theretofore
represented by such Certificates, subject, however, to the Surviving Corporation’s obligation to
pay any dividends or make any other distributions, in each case with a record date (i) prior to the
Effective Time that may have been declared or made by the Company on such Shares in accordance with
the terms of this Agreement or (ii) prior to the date of this Agreement, and in each case which
remain unpaid at the Effective Time.
(d) At the Effective Time, the stock transfer books of the Company will be closed and there
will not be any further registration of transfers of any shares of the Company’s capital stock
thereafter on the records of the Company. From and after the Effective Time, the
holders of Certificates and Book-Entry Shares will cease to have any rights with respect to
any Shares, except as otherwise provided for in this Agreement or by applicable Law. If, after the
Effective Time, Certificates (other than Certificates representing Dissenting Shares, Shares held
by Parent or any direct or indirect wholly-owned Subsidiary of Parent, and shares held in the
treasury of the Company) or Book-Entry Shares are presented to the Surviving Corporation, they will
be cancelled and exchanged for Merger Consideration as provided in this Article II. No
interest will accrue or be paid on any cash payable upon the surrender of Certificates or
Book-Entry Shares which immediately before the Effective Time represented the Shares.
(e) Promptly following the date which is one year after the Effective Time, the Surviving
Corporation will be entitled to require the Paying Agent to deliver to it any cash, including any
interest received with respect to such cash, and any Certificates or other documents, in its
possession relating to the transactions contemplated by this Agreement (the “Transactions”), which
had been made available to the Paying Agent and which have not been disbursed to holders of
Certificates or Book-Entry Shares or previously delivered to the Surviving Corporation, and
thereafter such holders will be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or similar Laws) only as general creditors of
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the Surviving Corporation with respect to the Merger Consideration payable upon due surrender of their Certificates or Book-Entry
Shares, without any interest on such Merger Consideration. Notwithstanding the foregoing, none of
Parent, the Surviving Corporation or the Paying Agent will be liable to any holder of Certificates
or Book-Entry Shares for Merger Consideration delivered to a Governmental Entity pursuant to any
applicable abandoned property, escheat or similar Law.
(f) Notwithstanding any provision in this Agreement to the contrary, Parent, the Surviving
Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable under this Agreement to any holder of Shares, and from amounts payable pursuant
to Section 2.3, such amounts as are required to be withheld or deducted under the Code, the
rules and regulations promulgated thereunder, or any provision of U.S. state or local Tax Law with
respect to the making of such payment. To the extent that amounts are so withheld or deducted and
paid over to the applicable Governmental Entity, such withheld or deducted amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the Shares or other
securities in respect of which such deduction and withholding were made.
Section 2.3 Treatment of Stock Plans.
(a) Each option to purchase shares granted under the Company Stock Plans (an “Option”) that is
outstanding and unexercised as of the Effective Time (whether vested or unvested) shall be adjusted
by the applicable Company Stock Plan committee and converted into the right of the holder to
receive from the Surviving Corporation an amount in cash equal to the product of (A) the total
number of shares of Common Stock previously subject to such Option and (B) the excess, if any, of
the Merger Consideration over the exercise price per share set forth in such Option, less any
required withholding Taxes (the “Option Cash Payment”), and as of the Effective Time
each holder of an Option shall cease to have any rights with respect thereto, except the right
to receive the Option Cash Payment. The Option Cash Payment shall be made promptly (and in any
event within 15 Business Days) following the Effective Time.
(b) Each award granted pursuant to a Company Plan that is maintained primarily for
international employees of the Company and its Subsidiaries (collectively, the “International
Equity Plans”) entitling the holder thereof to shares of Common Stock or cash equal to or based on
the value of shares of Common Stock (an “International
Award”) that is outstanding and, to the
extent applicable, unexercised as of the Effective Time (whether vested or unvested) will be
settled at the Effective Time in accordance with the terms and conditions of the applicable
International Equity Plan but solely in cash (such cash payment, the “Settlement Payment”). As of
the Effective Time, each holder of an International Award shall cease to have any rights with
respect thereto, except the right to receive the Settlement Payment. All Settlement Payments shall
be made promptly (and in any case within 15 Business Days) following the Effective Time;
provided, however, in the event that such payment would cause any additional Taxes
to be payable pursuant to Section 409A of the Code or other applicable Law with respect to an
International Award, the payment shall instead be made at the time specified in the applicable
International Equity Plan and related award agreement.
- 5 -
(c) Each award of a right under any Company Plan (other than awards of Options, International
Awards and Deferred Compensation Plans, the treatment of which is specified in Section
2.3(a), Section 2.3(b) and Section 2.3(d), respectively) entitling the holder
thereof to shares of Common Stock or cash equal to or based on the value of shares of Common Stock
(a “Share Unit”) that is outstanding or payable as of the Effective Time shall be adjusted by the
applicable Company Plan committee and converted into the right of the holder to receive from the
Surviving Corporation an amount in cash equal to the product of (A) (i) in the case of Share Units
subject to performance-based vesting conditions, the number of shares of Common Stock determined
based on performance as of the Effective Time (calculated in accordance with the terms of the
applicable Company Plans) and (ii) in the case of Share Units subject to time-based vesting
conditions, the total number of shares of Common Stock underlying such Share Units, and (B) the
Merger Consideration, less any required withholding Taxes (the “Share Unit Payment”),
provided, however, that the Share Unit Payment shall in no case be less than if it
had been determined in accordance with the terms of the applicable Company Plans. As of the
Effective Time each holder of a Share Unit shall cease to have any rights with respect thereto,
except the right to receive the applicable Share Unit Payment. All Share Unit Payments shall be
made promptly (and in any case within 15 Business Days) following the Effective Time;
provided, however, in the event that such payment would cause any additional Taxes
to be payable pursuant to Section 409A of the Code with respect to a Share Unit, the payment shall
instead be made at the time specified in the applicable Company Plan and related award document.
“Company Plan” for purposes of this Section 2.3 and Section 3.4, shall mean a
Company Plan without regard to materiality.
(d) All account balances (whether or not vested) under any Company Plan that provides for the
deferral of compensation and represents amounts notionally invested in a number of shares of Common
Stock or otherwise provides for distributions or benefits that are calculated based on the value of
a share of Common Stock (collectively, the “Deferred Compensation Plans”), shall be adjusted by the
applicable Company Plan committee as of the Effective Time, and shall be converted into a right of
the holder to receive an amount in cash equal to the product of (A) the number of shares of Common
Stock previously deemed invested under or otherwise referenced by such account and (B) the Merger
Consideration, less any required withholding Taxes (the “Deferred Payment”), and shall cease to
represent a right to receive a number of shares or cash equal to or based on the value of a number
of shares of Common Stock. The Deferred Payment shall be made at the time specified in the
applicable Company Plan and related deferral documents.
(e) Prior to the Effective Time, the Company shall take all such lawful action as may be
necessary (which includes satisfying the requirements of Rule 16b-3(e) promulgated under the
Exchange Act), without incurring any liability in connection therewith, to provide for and give
effect to the transactions contemplated by this Section 2.3.
Section 2.4 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary, any Shares held by a
holder who has demanded and perfected his, her or its demand for appraisal of his, her or its
Shares in accordance with Ohio Law (including but not limited to Section 1701.85 of Ohio Law) and
as of the Effective Time has neither effectively withdrawn nor lost his, her or
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its right to such appraisal (“Dissenting Shares”), will not be
converted into or represent a right to receive cash pursuant to Section 2.1(a), but the
holder of the Dissenting Shares will be entitled to only such rights as are granted to holders of
Dissenting Shares by Ohio Law.
(b) Notwithstanding the provisions of Section 2.4(a), if any holder of Shares who
demands appraisal of his, her or its Shares under Ohio Law effectively withdraws or loses (through
failure to perfect or otherwise) his, her or its right to appraisal, then as of the Effective Time
or the occurrence of such event, whichever later occurs, such holder’s Shares will automatically be
converted into and represent only the right to receive the Merger Consideration as provided in
Section 2.1(a), without interest thereon, upon surrender of Certificates or Book-Entry
Shares representing such Shares pursuant to Section 2.2.
(c) The Company shall give Merger Sub prompt notice of any written demands for appraisal or
payment of the fair value of any Shares, withdrawals of such demands, and any other instruments
served pursuant to Ohio Law received by the Company. The Company shall not voluntarily make any
payment with respect to any demands for appraisal and shall not, except with the prior written
consent of Merger Sub, settle or offer to settle any such demands.
Section 2.5 Adjustments. If, during the period between the date hereof and the
Effective Time, any change in the Shares shall occur, by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of shares, or any stock
dividend thereon with a record date during such period, but excluding any change that results from
any exercise of Options, the Merger Consideration, and any other amounts payable pursuant to this
Agreement, shall be appropriately adjusted.
Section 2.6 Lost Certificates. If any Certificates shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificates to
be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such
Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificates, the Paying Agent
will pay, in exchange for such lost, stolen or destroyed Certificates, the Merger Consideration to
be paid in respect of the Shares represented by such Certificates, as contemplated by this
Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub, subject to the exceptions with
respect to particular representations and warranties disclosed in the letter from the Company,
dated the date hereof, addressed to Parent and Merger Sub (the “Company Disclosure Letter”), and
except as set forth in the Company SEC Documents filed and publicly available prior to the date of
this Agreement, as follows:
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Section 3.1 Organization.
(a) Each of the Company and its Subsidiaries is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization and has all requisite corporate or other power and authority and all
necessary governmental approvals to own, lease and operate its properties and to carry on its
business as now being conducted, except (other than with respect to the Company’s due organization,
valid existence and good standing) where the failure to be so organized, existing and in good
standing or to have such power, authority and governmental approvals would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. For purposes of
analyzing whether any state of facts, change, development, effect, occurrence or condition has
resulted in a Material Adverse Effect under this Agreement, Parent and Merger Sub will not be
deemed to have knowledge of any state of facts, change, development, effect, occurrence or
condition relating to the Company or its Subsidiaries unless it is disclosed in the Company SEC
Documents or the Company Disclosure Letter.
(b) The Company and each of its Subsidiaries is duly qualified or licensed to do business, and
is in good standing, in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or licensing necessary, except
where the failure to be so duly qualified or licensed and in good standing would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. Except as set forth
in Section 3.1(b) of the Company Disclosure Letter, the Company does not own any equity
interests in any corporation or other entity, except for its Subsidiaries.
Section 3.2 Authorization; Validity of Agreement; Company Action.
(a) The Company has full corporate power and authority to execute and deliver this Agreement
and to consummate the Transactions. The execution, delivery and performance by the Company of this
Agreement, and the consummation by it of the Transactions, have been duly and validly authorized by
the Board of Directors of the Company (the “Company Board”), and 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, except that the consummation of the
Merger requires the Shareholder Approval. This Agreement has been duly executed and delivered by
the Company and, assuming due and valid authorization, execution and delivery of this Agreement 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, reorganization, insolvency, 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.
(b) Assuming the accuracy of the representation and warranty in Section 4.4, the
affirmative vote of the holders of a majority of the outstanding Shares to adopt this Agreement
(the “Shareholder Approval”) is the only vote or consent of the holders of any class or series of
the Company’s capital stock, or any of them, that is necessary in connection with the consummation
of the Merger.
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(c) At a meeting duly called and held, the Company Board (i) determined that this Agreement
and the Transactions are fair to and in the best interests of the Company’s shareholders and
declared this Agreement advisable, (ii) approved this Agreement and the Transactions, (iii)
directed that the adoption of this Agreement be submitted to a vote at a meeting of the Company’s
shareholders and (iv) resolved (subject to Section 5.2) to recommend to the Company’s
shareholders that they adopt this Agreement (such recommendation, the “Company Recommendation”).
(d) The copies of the Company’s Second Amended and Restated Articles of Incorporation and
Second Amended and Restated Regulations, in the forms most recently filed in the Company SEC
Documents, are true, complete and correct copies of such documents as in effect as of the date of
this Agreement.
Section 3.3 Consents and Approvals; No Violations.
(a) Except for (i) the filing with the SEC of the preliminary proxy statement and the Proxy
Statement, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of
Ohio pursuant to Ohio Law, (iii) the Shareholder Approval and (iv) filings, permits,
authorizations, consents and approvals as may be required under, and other applicable requirements
of, (A) the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (B) the Securities
Act (as defined below), (C) the rules and regulations of the New York Stock Exchange, and (D) the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any foreign
antitrust or competition Laws, no consents or approvals of, or filings, declarations or
registrations with, any national, supranational, federal, state or local court, administrative or
regulatory agency or commission or other governmental authority or instrumentality, domestic or
foreign (each a “Governmental Entity”), are necessary for the consummation by the Company of the
Transactions, other than such other consents, approvals, filings, declarations or registrations
that, if not obtained, made or given, would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(b) Except as set forth in Section 3.3(b) of the Company Disclosure Letter, neither
the execution and delivery of this Agreement by the Company nor the consummation by the Company of
the Transactions, nor compliance by the Company with any of the terms or provisions hereof, will
(i) conflict with or violate any provision of the Company’s Second Amended and Restated Articles of
Incorporation or its Second Amended and Restated Regulations or any of the similar organizational
documents of any of its Subsidiaries or (ii) assuming that the authorizations, consents and
approvals referred to in Section 3.3(a) are duly obtained, (x) violate any Order or Law
applicable to the Company or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in the loss of any material benefit under, constitute
a default (or an event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right to termination or cancellation under, accelerate the
performance required by, or result in the creation of any Encumbrance upon any of the respective
properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries is a party, or by
which they or any of their respective properties or assets may be bound or affected, except, in the
case of clause (ii) above, for such
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violations, conflicts, breaches, defaults, losses, terminations of rights thereof,
accelerations or Encumbrance creations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
Section 3.4 Capitalization.
(a) The authorized capital stock of the Company consists of 2,000,000 shares of serial
preferred stock without par value designated serial preferred stock (the “Serial Preferred Stock”),
25,000,000 shares of serial preferred stock without par value designated serial preference shares
(the “Serial Preference Shares”), and 120,000,000 shares of common stock without par value (the
“Common Stock”). As of March 11, 2011, (i) no shares of Serial Preferred Stock are issued and
outstanding, (ii) no shares of Serial Preference Shares are issued and outstanding, (iii)
64,202,753 Shares of Common Stock are issued and outstanding, (iv) 21,993,141 shares of Common
Stock are issued and held in the treasury of the Company, (v) 2,750,623 shares of Common Stock are
reserved for issuance under the Company Stock Plans in respect of future awards, (vi) 1,530,046
shares of Common Stock are issuable upon the exercise of outstanding Options, (vii) 935,954 shares
of Common Stock are issuable upon the vesting of Share Units subject to performance-based vesting
conditions, assuming achievement of performance goals at the maximum level of performance at the
end of the applicable performance period, and (viii) 7,577 shares of Common Stock are issuable upon
the vesting of Share Units subject to time-based vesting conditions. All of the outstanding Shares
of Common Stock are, and all shares of Common Stock which may be issued pursuant to the exercise of
outstanding Options will be, when issued in accordance with the terms of the Options, duly
authorized, validly issued, fully paid and non-assessable. Except as set forth in this Section
3.4(a) and in Sections 3.4(a) and (b) of the Company Disclosure Letter,
and for changes resulting from the exercise of the Options outstanding as of the date hereof, there
are no (i) shares of capital stock or other equity interests or voting securities of the Company or
any Subsidiary authorized, issued or outstanding, (ii) existing securities, options, warrants,
calls, preemptive rights, subscription or other rights, agreements, arrangements, commitments,
derivative contracts, forward sale contracts or undertakings of any character, to which the Company
or any of its Subsidiaries is a party, or by which the Company or any of its Subsidiaries is bound,
obligating the Company or any of its Subsidiaries to (1) issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or other equity interest or voting security
in the Company or any of its Subsidiaries or securities convertible into or exchangeable for such
shares of capital stock or other equity interests or voting securities, (2) issue, grant, extend
or enter into any such security, option, warrant, call, preemptive right, subscription or other
right, agreement, arrangement, commitment, derivative contract, forward sale contract, or
undertaking, or (3) make any payment based on or resulting from the value or price of the Shares or
of any such security, option, warrant, call, preemptive right, subscription or other right,
agreement, arrangement, commitment, derivative contract, forward sale contract or undertaking,
(iii) outstanding contractual obligations of the Company or any of its Subsidiaries to provide
funds to make any investment (in the form of a loan, capital contribution or otherwise) in any
Subsidiary of the Company or any other entity or (iv) issued or outstanding performance awards,
units, rights to receive shares of Company’s Common Stock on a deferred basis, or rights to
purchase or receive Company’s Common Stock or other equity interest or voting securities issued or
granted by the Company to any current or former director, officer, employee or consultant of the
Company (the items referred to in clauses (i) through (iv) of or with respect
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to any Person, collectively, “Rights”). Except for acquisitions, or deemed acquisitions, of
Common Stock or other equity securities of the Company in connection with (1) the payment of the
exercise price of Options with Common Stock (including in connection with “net” exercises), (2)
required tax withholding in connection with the exercise of Options and vesting of Share Units and
(3) forfeitures of Options and Share Units, there are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or any of its Subsidiaries, other than pursuant to the applicable Company
Plans. No Subsidiary of the Company owns any Shares.
(b) All of the outstanding shares of capital stock and other Rights of each of the Company’s
Subsidiaries are owned beneficially and of record by the Company or a wholly owned Subsidiary of
the Company, and all such shares and Rights have been validly issued and are fully paid and
nonassessable and are owned by either the Company or a wholly owned Subsidiary of the Company free
and clear of any Encumbrances. Section 3.4 of the Company Disclosure Letter lists each
Subsidiary of the Company and its jurisdiction of organization.
(c) There are no voting trusts or other agreements or understandings to which the Company or
any of its Subsidiaries is a party, or of which the Company has Knowledge, with respect to the
voting of the capital stock and other Rights of the Company or any of its Subsidiaries.
Section 3.5 SEC Reports and Financial Statements.
(a) The Company has filed with or furnished to the SEC, and has made available to Parent, true
and complete copies of all forms, reports, schedules, statements and other documents required to be
filed or furnished by it since January 1, 2010, under the Exchange Act or the Securities Act of
1933, as amended (the “Securities Act”) (collectively, the “Company SEC Documents”). As of its
respective date (and if amended, as of the date of the last such amendment), each Company SEC
Document, including any financial statements, schedules and exhibits included therein or attached
thereto, complied in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and, without limitation of the foregoing, (i) did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated in such
Company SEC Document or necessary in order to make the statements in such Company SEC Document, in
light of the circumstances under which they were made, not misleading and (ii) complied in all
material respects with the applicable requirements of the Exchange Act, the Securities Act and the
Xxxxxxxx-Xxxxx Act of 2002 (“SOX”), as the case may be, and the applicable rules and regulations of
the SEC under the Exchange Act, the Securities Act and SOX, as the case may be. None of the
Company’s Subsidiaries is, or at any time since January 1, 2010, has been, required to file, or has
voluntarily filed, any forms, reports or other documents with the SEC. Each of the consolidated
financial statements included in the Company SEC Documents (the “Financial Statements”) (w) has
been prepared from, and is in accordance with, the books and records of the Company and its
consolidated Subsidiaries, (x) complies in all material respects with the applicable accounting
requirements and with the published rules and regulations of the SEC with respect to such
requirements, (y) has been prepared in accordance with the United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis during the periods involved
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(except as may be indicated in the Financial Statements or in the notes to the Financial
Statements and subject, in the case of unaudited statements, to normal year-end audit adjustments
and the absence of footnote disclosure), and (z) fairly presents, in all material respects, the
consolidated financial position and the consolidated results of operations and cash flows (and
changes in financial position, if any) of the Company and its consolidated Subsidiaries as of the
date and for the periods referred to in the Financial Statements. If at any time from the date
hereof and until the Effective Time, the Company shall obtain knowledge of any material facts that
would require supplementing or amending any of the foregoing documents in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
or to comply with applicable Laws, such amendment or supplement shall be promptly filed with the
SEC and, as required by law, disseminated to the shareholders of the Company.
(b) Neither the Company nor any of the Company Subsidiaries is a party to, or has any
commitment to become a party to, any joint venture, off-balance sheet partnership or any similar
contract or arrangement (including any contract relating to any transaction or relationship between
or among the Company and any of its Subsidiaries, on the one hand, and any unconsolidated
Affiliate, including any structured finance, special purpose or limited purpose entity or person,
on the other hand or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation
S K of the SEC)), where the result, purpose or effect of such arrangement is to avoid disclosure of
any material transaction involving, or material liabilities of, the Company or any of its
Subsidiaries in the Company’s or such Subsidiary’s audited financial statements or other Company
SEC Documents.
(c) To the Knowledge of the Company, as of the date hereof, (i) the earnings guidance included
in the Company’s February 2, 2011 press release (the “Company Earnings Guidance”) continues to be
reasonable, based on and subject to the assumptions stated in such release, and (ii) no event,
circumstance, change, occurrence, state of facts or effect has occurred which would cause the
Company to change such earnings guidance.
(d) Each of the principal executive officers of the Company and the principal financial
officer of the Company has made all certifications required by Rule 13a 14 or 15d 14 under the
Exchange Act and Sections 302 and 906 of SOX with respect to the Company SEC Documents, and the
statements contained in such certifications are accurate in all material respects as of the date of
this Agreement. For purposes of this Agreement, “principal executive officer” and “principal
financial officer” shall have the meanings given to such terms in SOX.
Section 3.6 Absence of Certain Changes. Since December 31, 2010, (a) the Company and
its Subsidiaries have conducted their respective businesses only in the ordinary course of business
consistent with past practice and (b) there has not been any event, circumstance, change,
occurrence, state of facts or effect (including the incurrence of any liabilities of any nature,
whether or not accrued, contingent or otherwise) that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as set forth in Section
3.6 of the Company Disclosure Letter or in the Company SEC Documents, since December 31, 2010
through the date of this Agreement, neither the Company nor any of its Subsidiaries has taken any
action that would have constituted a breach of Section 5.1 hereof, had the covenants
therein applied since December 31, 2010.
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Section 3.7 No Undisclosed Material Liabilities. There are no liabilities or
obligations of the Company or any of its Subsidiaries, whether accrued, absolute, determined or
contingent, except for (i) liabilities or obligations disclosed and provided for in the balance
sheets included in the Financial Statements (or in the notes thereto) filed and publicly available
prior to the date of this Agreement, (ii) liabilities or obligations incurred in connection with
the Transactions, (iii) liabilities or obligations incurred in the ordinary course of business
consistent in the past practice since December 31, 2010, and (iv) liabilities or obligations that
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 3.8 Compliance with Laws and Court Orders.
(a) The Company and each of its Subsidiaries is and, since January 1, 2008, has been in
compliance with, and, to the Knowledge of the Company, is not under investigation with respect to
and has not been threatened to be charged with or given notice of any violation of, any applicable
Law or Order, except for failures to comply or violations that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. The Company and its
Subsidiaries hold all governmental licenses, authorizations, permits, consents, approvals,
variances, exemptions and orders necessary for the operation of the businesses of the Company and
its Subsidiaries, taken as a whole (the “Company Permits”), except where such failure would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
Company and each of its Subsidiaries are in compliance with the terms of the Company Permits,
except for failures to comply or violations that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Without limitation of Section 3.8(a), to the Knowledge of the Company, (i) neither
the Company and its Subsidiaries and controlled Affiliates (which, for all purposes of this
Section 3.8(b), shall be deemed to include the entities identified in numbers (1) through
(3) on Section 3.8(b) of the Company Disclosure Letter), nor any of its or their directors
or officers is listed on the Specially Designated Nationals and Blocked Person list or other
similar lists maintained by the Office of Foreign Assets Control, by the United States Department
of the Treasury or pursuant to executive orders, and (ii) neither the Company and its Subsidiaries
and controlled Affiliates, nor any of its or their directors, officers, employees, agents or other
Persons acting on the Company’s or any Company Subsidiary’s behalf (A) has taken, or caused to be
taken, directly or indirectly, any action that would cause the Company or any of its Subsidiaries
to be in violation of any Anti-Corruption Law, or (B) has corruptly made, promised, offered or
authorized, or has caused or authorized any consultants, joint venture partners or representatives
corruptly to make, promise or offer, any payment or transfer of anything of value, directly or
indirectly, to any official, employee or agent of any Governmental Entity for the purpose of (1)
influencing such Person to take any action or decision or to omit to take any action, in his or her
official capacity, (2) inducing such Person to use his or her influence with a Governmental Entity
to affect any act or decision of a Governmental Entity, or (3) securing any improper advantage; and
each of it and each of its controlled Affiliates complies with and implements internal compliance
policies with respect to applicable Anti-Corruption Laws. As used in this Section 3.8(b),
the term “Anti-Corruption Laws” means each Law, regulation, treaty or convention relating to
anti-money laundering, anti-terrorism financing, anti-bribery, anti-corruption or similar matters,
including the Foreign Corrupt Practices Act of 1977, as amended.
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Section 3.9 Material Contracts.
(a) Except as set forth in Section 3.9(a) of the Company Disclosure Letter, as of the
date hereof, neither of the Company nor any of its Subsidiaries is a party to or bound by any: (i)
contract (other than this Agreement or a Company Plan) that would be required to be filed by the
Company as a material contract pursuant to Item 601(b)(10) of Regulation S-K of the SEC; (ii)
indenture, credit agreement, loan agreement, security agreement, guarantee, note, mortgage or other
evidence of Indebtedness or agreement providing for Indebtedness in excess of $10,000,000; (iii)
written contract (other than this Agreement) for the sale of any of its assets after the date
hereof (other than sales of product in the ordinary course of business); (iv) collective bargaining
agreement; (v) written contract that contains a put, call, right of first refusal or similar right
pursuant to which the Company or any of its Subsidiaries would be required to purchase or sell, as
applicable, any equity interests of any Person; (vi) settlement agreement or similar agreement with
a Governmental Entity or Order to which the Company or any of its Subsidiaries is a party involving
future performance by the Company or any of its Subsidiaries which is material; (vii) contract
providing for indemnification (including any obligations to advance funds for expenses) of the
current or former directors or officers of the Company or any of its Subsidiaries; or (viii) other
contract (other than this Agreement, purchase orders for the purchase of inventory or agreements
between the Company and any of its wholly owned Subsidiaries or between any of the Company’s wholly
owned Subsidiaries) under which the Company and its Subsidiaries are obligated to make or receive
payments in the future in excess of $10,000,000 per annum or $20,000,000 during the life of the
contract. Each such contract described in clauses (i)-(viii) is referred to herein as a “Material
Contract.”
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries is (and, to the
Knowledge of the Company, no other party is) in default under any Material Contract, (ii) each of
the Material Contracts is in full force and effect, and is the valid, binding and enforceable
obligation of the Company and its Subsidiaries, and to the Knowledge of the Company, of the other
parties thereto, except that (x) such enforcement may be subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar Laws, now or hereafter in effect, affecting
creditors’ rights generally and (y) 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, (iii) the Company and its Subsidiaries have
performed all respective material obligations required to be performed by them to date under the
Material Contracts, are not and no circumstance exists, which (with or without the lapse of time or
the giving of notice, or both) would cause them to be, in breach thereunder and (iv) neither the
Company nor any of its Subsidiaries has received any notice of termination with respect to, and, to
the Knowledge of the Company, no party has threatened to terminate, any Material Contract.
Section 3.10 Information in Proxy Statement. The proxy statement relating to the
Special Meeting (such proxy statement, as amended or supplemented from time to time, the “Proxy
Statement”) will not, at the date it is first mailed to the Company’s shareholders and at the time
of the Special Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated in the Proxy Statement or necessary in order to make the
statements in the Proxy Statement, in light of the circumstances under which they are made, not
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misleading. The Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding
anything to the contrary in this Section 3.10, no representation or warranty is made by the
Company with respect to information contained or incorporated by reference in the Proxy Statement
supplied by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by
reference in the Proxy Statement.
Section 3.11 Litigation. There are no Actions pending or, to the Knowledge of the
Company, threatened against the Company or any of its Subsidiaries or any officer, director or
employee of the Company in such capacity, which would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
a party or subject to, or in default under, any Order which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 3.12 Employee Compensation and Benefit Plans; ERISA.
(a) As used herein, the term “Company Plan” shall mean (except as set forth in the last
sentence of Section 2.3(c)) each material “employee benefit plan” (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and each
other material equity incentive, compensation, severance, employment, change-in-control, retention,
fringe benefit, collective bargaining, bonus, incentive, savings, retirement, deferred
compensation, or other benefit plan, agreement, program, policy or arrangement, whether or not
subject to ERISA (including any related funding mechanism), in each case other than a
“multiemployer plan,” as defined in Section 3(37) of ERISA (“Multiemployer Plan”), under which (i)
any current or former employee, officer, director, contractor or consultant of the Company or any
of its Subsidiaries (“Covered Employees”) has any present or future right to benefits and which are
entered into, contributed to, sponsored by or maintained by the Company or any of its Subsidiaries,
or (ii) the Company or any of its Subsidiaries has any present or future liability.
(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect:
(i) Each Company Plan is in compliance with all applicable Laws, including ERISA and
the Code.
(ii) Each Company Plan that is intended to be a qualified plan under Section 401(a) of
the Code has received a favorable determination letter to that effect from the IRS and, to
the Knowledge of the Company, no event has occurred since the date of such determination
that would reasonably be expected to adversely affect such determination.
(iii) No condition exists that is reasonably likely to subject the Company or any of
its ERISA Affiliates to any direct or indirect liability under Title IV of ERISA or to a
civil penalty under Section 502(j) of ERISA or liability under Section 4069 of ERISA or
Section 4975, 4976, or 4980B of the Code or other liability with respect to the Company
Plans.
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(iv) No material Actions are pending or, to the Knowledge of the Company, threatened
with respect to any Company Plan.
(v) (A) Each Company Plan that is maintained primarily for the benefit of Covered Employees
based outside of the United States (a “Non-U.S. Plan”) has been operated in accordance, and is in
compliance, in all respects, with all applicable Laws and has been operated in accordance, and is
in compliance, with its terms; (B) each Non-U.S. Plan that is required to be funded is funded to
the extent required by applicable Law, and with respect to all other Non-U.S. Plans, adequate
provision has been made therefor on the accounting statements of the applicable Company or
Subsidiary entity; and (C) no liability or obligation of the Company or any of its Subsidiaries
exists with respect to such Non-U.S. Plans that has not been disclosed on Section
3.12(b)(v) of the Company Disclosure Letter.
(vi) There is no (A) unfair labor practice, labor dispute or labor arbitration
proceeding pending or, to the Knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries, or (B) lockout, strike, slowdown, work stoppage or, to
the Knowledge of the Company, threat thereof by or with respect to any employees of the
Company or any of its Subsidiaries.
(c) Except as set forth in Section 3.12(c) of the Company Disclosure Letter, the
consummation of the Transactions will not, either alone or in combination with another event, (i)
entitle any current or former employee or officer of the Company or any of its Subsidiaries to any
material 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 materially
increase the amount of compensation due any such employee or officer.
Section 3.13 Properties.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, the Company or one of its Subsidiaries has good fee simple title to all
Owned Real Property and valid leasehold estates in all Leased Real Property free and clear of all
Encumbrances, except Permitted Encumbrances. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the Company or one of its Subsidiaries
has exclusive possession of each Leased Real Property and Owned Real Property, other than any use
and occupancy rights granted to third-party owners, tenants or licensees pursuant to agreements
with respect to such real property entered in the ordinary course of business.
(b) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) each lease for the Leased Real Property is in full force and effect
and is valid, binding and enforceable in accordance with its terms, except that (x) such
enforcement may be subject to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (y) 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, and (ii) there is no default under any lease for the Leased Real Property either by the
Company or its Subsidiaries or, to the Knowledge of the Company, by any other party thereto,
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and no event has occurred that, with the lapse of time or the giving of notice or both, would
constitute a default by the Company or its Subsidiaries thereunder.
(c) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) there are no pending or, to the Knowledge of the Company, threatened
condemnation or eminent domain proceedings that affect any Owned Real Property or Leased Real
Property, and (ii) the Company has not received any written notice of the intention of any
Governmental Entity or other Person to take any Owned Real Property or Leased Real Property.
Section 3.14 Intellectual Property. Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, (i) the Company or one of its
Subsidiaries owns all right, title, and interest in, or has the right to use, pursuant to a license
or otherwise, in each case, free and clear of all Encumbrances except Permitted Encumbrances, all
Intellectual Property Rights that are required to operate the Company’s business as presently
conducted, and (ii) (x) there is no pending, and the Company has not received any written notice of
any actual or threatened, Actions alleging a violation, misappropriation or infringement of the
Intellectual Property Rights of any other Person by Company or its Subsidiaries except for any of
the foregoing that have since been fully and finally resolved, (y) to the Knowledge of the Company,
the operation of the business of the Company as currently conducted does not violate,
misappropriate or infringe the Intellectual Property Rights of any other Person, and (z) to the
Knowledge of the Company, no other Person has violated, misappropriated or infringed any
Intellectual Property Rights owned by the Company or any of its Subsidiaries.
Section 3.15 Environmental Laws.
(a) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) the Company and its Subsidiaries comply and have in the past five
years complied with all applicable Environmental Laws, and possess and comply, and have complied,
with all applicable Environmental Permits required under such Laws to operate the businesses of the
Company and its Subsidiaries as currently operated; (ii) there are no, and there have not been any,
Materials of Environmental Concern at any property currently or, to the Knowledge of the Company,
formerly owned or operated by the Company or its Subsidiaries, under circumstances that have
resulted in or are reasonably likely to result in liability of the Company or its Subsidiaries
under any applicable Environmental Laws; (iii) none of the Company or any of its Subsidiaries has
received any written notification alleging that it is liable, or request for information, pursuant
to any applicable Environmental Law, concerning any release, threatened release of, or exposure to,
any Materials of Environmental Concern at any location except, with respect to any such
notification or request for information concerning any such release or threatened release, to the
extent such matter has been fully resolved with the appropriate Governmental Entity or Person, and
(iv) none of the Company or any of its Subsidiaries has received any written notice regarding any
actual or alleged violation of any Environmental Laws or Environmental Permits, including a notice
of violation, a notice of non-compliance, or notice of requirements. There are no Actions arising
under Environmental Laws pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries which would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
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(b) Notwithstanding any other representations and warranties in this Agreement, the
representations and warranties in this Section 3.15 are the only representations and
warranties in this Agreement with respect to Environmental Laws, Environmental Permits or Materials
of Environmental Concern.
Section 3.16 Taxes.
(a) The Company and each of its Subsidiaries has timely filed all material Tax Returns that it
was required to file and has timely paid all Taxes shown thereon as due and owing and all other
Taxes required to be paid by it. All such Tax Returns were correct and complete in all material
respects.
(b) No audit or other proceeding with respect to any material Taxes due from the Company or
any of its Subsidiaries, or any material Tax Return of the Company or any of its Subsidiaries, is
pending or threatened in writing by any Governmental Entity. Each assessed deficiency resulting
from any audit or examination relating to Taxes by any Governmental Entity has been timely paid and
there is no assessed deficiency, refund litigation, proposed adjustment or matter in controversy
with respect to any Taxes due and owing by the Company or any of its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries has agreed to any extension or waiver of
the statute of limitations applicable to any material Tax Return, or agreed to any extension of
time with respect to a material Tax assessment or deficiency, which period (after giving effect to
such extension or waiver) has not yet expired.
(d) Neither the Company nor any of its Subsidiaries is a party to any material Tax allocation
or sharing agreement.
(e) The Company and each of its Subsidiaries has withheld and remitted all material Taxes
required to have been withheld and remitted under applicable Law in connection with any amounts
paid or owing to any employee, independent contractor, creditor, shareholder, member or other
party.
(f) There are no Encumbrances for unpaid Taxes on the assets of the Company or any of its
Subsidiaries, except Encumbrances for current Taxes not yet due and payable.
(g) Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated
group of corporations within the meaning of Section 1504 of the Code (other than a group the common
parent of which is the Company) or (ii) has any liability for Taxes of any Person (other than the
Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local or foreign Law), as a transferee or successor, by contract or otherwise.
Section 3.17 Opinions of Financial Advisors. The Company Board has received the
opinions of each of Evercore Group L.L.C. and Citigroup Global Markets Inc. (the “Financial
Advisors”), to the effect that, as of the date of such opinions, the Merger Consideration to be
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received by holders of the Company’s Common Stock is fair, from a financial point of view, to
such holders.
Section 3.18 Brokers or Finders. Except for the Financial Advisors, no agent, broker,
investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s
or finder’s fee or any other commission or similar fee or payment from the Company or any of its
Subsidiaries in connection with any of the Transactions.
Section 3.19 State Takeover Statutes. The Company Board has taken all necessary
action so that the “moratorium,” “fair price,” “control share acquisition” and other similar
anti-takeover provisions of Ohio Law or the similar Laws of any jurisdiction (each, a “Takeover
Statute”) and any anti-takeover or similar provisions contained in the governing documents of the
Company or any of its Subsidiaries are not applicable to the Transactions.
Section 3.20 Transactions with Affiliates. Since the date the Company’s last proxy
statement was filed with the SEC and through the date of this Agreement, no event has occurred that
would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated
by the SEC.
Section 3.21 No Other Representations or Warranties. Except for the representations
and warranties contained in this Article III, neither the Company nor any other Person
makes any other express or implied representation or warranty on behalf of the Company or any of
its Affiliates, and for the avoidance of doubt, neither the Company nor any of its Affiliates makes
any express or implied representation or warranty with respect to “Information” as defined in the
Confidentiality Agreement, dated March 7, 2011, between the Company and Parent (the
“Confidentiality Agreement”).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to the Company as follows:
Section 4.1 Organization. Each of Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization and has all requisite corporate or other power and authority and all
necessary governmental approvals to own, lease and operate its properties and to carry on its
business as now being conducted, except (other than with respect to Parent’s or Merger Sub’s due
organization, valid existence and good standing) where the failure to be so organized, existing and
in good standing or to have such power, authority and governmental approvals would not reasonably
be expected to have a material adverse effect on the ability of Parent and Merger Sub to consummate
the Merger and the other Transactions. Parent owns all of the issued and outstanding capital stock
of the Merger Sub.
Section 4.2 Authorization; Validity of Agreement; Necessary Action. Each of Parent
and Merger Sub has full corporate power and authority to execute and deliver this Agreement and to
consummate the Transactions. The execution, delivery and performance by Parent and
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Merger Sub of this Agreement, and the consummation by it of the Transactions have been duly
and validly authorized by the respective boards of directors of Parent and Merger Sub and by Parent
as the sole shareholder of Merger Sub, and no other corporate action on the part of Parent or
Merger Sub is necessary to authorize the execution, delivery and performance by Parent and Merger
Sub of this Agreement and the consummation of the Transactions. This Agreement has been duly
executed and delivered by Parent and Merger Sub and, assuming due and valid authorization,
execution and delivery of this Agreement 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
(a) such enforcement may be subject to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally
and (b) 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 4.3 Consents and Approvals; No Violations.
(a) Except for filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, (A) the Exchange Act, (B) the Securities Act, (C) the
rules and regulations of the New York Stock Exchange, and (D) the HSR Act, and any foreign
antitrust or competition laws, no consents or approvals of, or filings, declarations or
registrations with, any Governmental Entity are necessary for the consummation by Parent and Merger
Sub of the Transactions, other than such other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not reasonably be expected to have a
material adverse effect on the ability of Parent and Merger Sub to consummate the Merger and the
other Transactions.
(b) Neither the execution and delivery of this Agreement by Parent or Merger Sub nor the
consummation by Parent or Merger Sub of the Transactions, nor compliance by Parent or Merger Sub
with any of the terms or provisions hereof, will (i) conflict with or violate any provision of the
organizational documents of Parent or Merger Sub or of any of their respective Subsidiaries or (ii)
assuming that any required authorizations, consents and approvals are duly obtained, (x) violate
any Order or Law applicable to Parent or Merger Sub or any of their respective Subsidiaries or any
of their respective properties or assets, or (y) violate, conflict with, result in the loss of any
material benefit under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right to termination or
cancellation under, accelerate the performance required by, or result in the creation of any
Encumbrance upon any of the respective properties or assets of either Parent or Merger Sub or any
of their respective Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which either Parent or Merger Sub or any of their respective Subsidiaries is a party,
or by which they or any of their respective properties or assets may be bound or affected, except,
in the case of clause (ii) above, for such violations, conflicts, breaches, defaults, losses,
terminations of rights thereof, accelerations or Encumbrance creations which would not reasonably
be expected to have a material adverse effect on the ability of Parent and Merger Sub to consummate
the Merger and the other Transactions.
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Section 4.4 Ownership of Common Stock. Neither Parent nor any of its Subsidiaries
(including Merger Sub) is, and at no time during the last three years has Parent or any of its
Subsidiaries (including Merger Sub) been, an “interested shareholder” of the Company as defined in
Section 1704.01 of Ohio Law. Except for any Shares of Common Stock that may be owned by any of
Parent’s Subsidiaries’ pension funds that are not managed by Parent (which Shares of Common Stock,
if any, are less than 1% of the Company’s outstanding shares of Common Stock), neither Parent nor
any of its Subsidiaries (including Merger Sub) owns (directly or indirectly, beneficially or of
record), or is a party to any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of, any shares of capital stock of the Company (other than as
contemplated by this Agreement).
Section 4.5 Information in Proxy Statement. None of the information supplied or to be
supplied by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first mailed to the Company’s shareholders
and at the time of the Special Meeting contain any untrue statement of a material fact or omit to
state any material fact required to be stated in the Proxy Statement or necessary in order to make
the statements in the Proxy Statement, in light of the circumstances under which they are made, not
misleading.
Section 4.6 Financing. Parent and Merger Sub have, and at all times through the
Closing shall have, sufficient funds available to finance and consummate the Transactions.
Section 4.7 No Prior Activities. Except for obligations or liabilities incurred in
connection with its incorporation or organization or the negotiation and consummation of this
Agreement and the Transactions, Merger Sub has not incurred any obligations or liabilities, and has
not engaged in any business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any Person or entity.
Section 4.8 Litigation. As of the date of this Agreement, there are no Actions
pending or, to the Knowledge of Parent, threatened against Parent or Merger Sub or, to the
Knowledge of Parent, any officer, director or employee of Parent or Merger Sub in such capacity,
which would, individually or in the aggregate, prevent or materially delay Parent or Merger Sub
from performing its obligations under this Agreement. Neither Parent nor Merger Sub is a party or
subject to or in default under any Order which would prevent or materially delay Parent or Merger
Sub from performing its obligations under this Agreement
Section 4.9 Disclaimer of Warranties. Parent and Merger Sub acknowledge that neither
the Company nor any Person has made any express or implied representations or warranty on behalf of
the Company or any of its Affiliates as to the accuracy or completeness of any information
regarding the Company provided to Parent and Merger Sub, including the “Information,” as defined
in the Confidentiality Agreement, except as expressly set forth in Article III and Parent
and Merger Sub further agree that, except for the matters expressly set forth in Article
III, neither the Company nor any Person shall have or be subject to any liability to Parent,
Merger Sub or any other Person resulting from the distribution to Parent and Merger Sub, or
Parent’s or Merger Sub’s use of, any such information. In connection with any investigation by
Parent and Merger Sub of the Company and its Subsidiaries, Parent and Merger Sub have received from
the Company and/or its Affiliates and/or other Persons on behalf of the
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Company certain projections. Parent and Merger Sub acknowledge that there are uncertainties
inherent in attempting to make such projections, that Parent and Merger Sub are familiar with such
uncertainties, that Parent and Merger Sub are taking full responsibility for making their own
evaluation of the adequacy and accuracy of all projections so furnished to them, and that, except
as provided in this Agreement with respect to the Company Earnings Guidance referred to in
Section 3.5(c), Parent and Merger Sub shall have no claim against the Company or any other
Person with respect thereto. Accordingly, except as set forth in Section 3.5(c), Parent
and Merger Sub acknowledge that neither the Company nor any other Person on behalf of the Company
makes any representation or warranty with respect to such projections.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. Except (A) as expressly contemplated
by this Agreement, (B) as set forth on Section 5.1 of the Company Disclosure Letter, (C) as
required by applicable Law, or (D) as consented to in writing by Parent after the date of this
Agreement and prior to the Effective Time, which consent, solely in the case of clauses (v), (vi)
and (vii) below, shall not be unreasonably withheld or delayed, the Company agrees that:
(i) the Company and its Subsidiaries will conduct business only in the ordinary course
of business consistent with past practice;
(ii) the Company will not amend its Second Amended and Restated Articles of
Incorporation or Second Amended and Restated Regulations and the Company’s Subsidiaries will
not amend their certificate of incorporation, bylaws or other comparable charter or
organizational documents;
(iii) neither the Company nor any of its Subsidiaries will (A) declare, set aside or
pay any dividend or other distribution (including any constructive or deemed distribution),
whether payable in cash, stock or other property, with respect to its capital stock, or
otherwise make any payments to its shareholders in their capacity as such, other than the
Company’s ordinary course quarterly dividends to holders of Shares in a per Share amount no
greater than the Company’s most recently declared dividend, with record and payment dates in
accordance with the Company’s customary dividend schedule; (B) issue, sell, grant, transfer,
pledge, dispose of or encumber or authorize or propose to issue, sell, grant, transfer,
pledge, dispose of or encumber any additional shares of capital stock or other Rights of the
Company or any of its Subsidiaries (including treasury stock), other than in respect of the
shares of the Company’s capital stock reserved for issuance on the date of this Agreement
and issued pursuant to the exercise of Options outstanding on the date of this Agreement,
(C) split, combine, subdivide or reclassify the Shares or any other outstanding capital
stock of the Company or any of the Subsidiaries of the Company or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution for any shares
of capital stock or other Rights of the Company or any of its Subsidiaries or (D) redeem,
purchase or otherwise
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acquire, directly or indirectly, any capital stock or other Rights of the Company or
any of its Subsidiaries;
(iv) except as required by applicable Law or under the terms of any Company Plan in
effect as of the date of this Agreement, the Company will not and will not permit its
Subsidiaries to increase the compensation payable or to become payable to any of its
officers, directors, employees, agents, consultants or Affiliates, or enter into, establish,
amend or terminate any Company Plans, except increases in salaries, wages and benefits of
employees who are not directors or officers of the Company or its Subsidiaries made in the
ordinary course of business consistent with past practice;
(v) neither the Company nor any of its Subsidiaries will (A) incur or assume any long-term
Indebtedness, or except in the ordinary course of business, incur or assume any short-term
Indebtedness in amounts not consistent with past practice, (B) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person, except in the ordinary course of business and consistent with past
practice or (C) make any loans, advances or capital contributions to, or investments in, any other
Person except in the ordinary course of business and consistent with past practice;
(vi) make any acquisition or investment in a business either by purchase of stock or
securities, merger or consolidation, contributions to capital, loans, advances, property
transfers, or purchases of any property or assets of any other Person other than a direct or
indirect wholly owned Subsidiary of the Company, or otherwise make or authorize any capital
expenditure, other than capital expenditures contemplated by the Company’s existing capital
budget, a copy of which has been furnished to Parent;
(vii) neither the Company nor any of its Subsidiaries will (A) pay, discharge, waive,
settle or satisfy any rights, claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment, discharge, waiver,
settlement or satisfaction, (x) in the ordinary course of business consistent with past
practice, of claims, liabilities or obligations reflected or reserved against in, or
contemplated by, the Financial Statements (or the notes to the Financial Statements) or of
claims, liabilities or obligations incurred since the date of the Financial Statements in
the ordinary course of business consistent with past practice or (y) for amounts,
individually or in the aggregate, not to exceed $5,000,000 (in excess of third party
insurance) or (B) waive any claims of substantial value;
(viii) neither the Company nor any of its Subsidiaries will change any of the accounting
methods, principles or practices used by it unless required by a change in GAAP or Law;
(ix) neither the Company nor any of its Subsidiaries will (A) adopt a plan of complete
or partial liquidation, dissolution, merger, consolidation, business combination,
restructuring, recapitalization or other reorganization (other than this Agreement), (B)
acquire by merging or consolidating with, or by purchasing a substantial equity interest in
or portion of the assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
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division thereof or (C) acquire, transfer, lease, license, sell, mortgage, pledge,
dispose of or encumber any material assets, other than, in the case of this clause (C),
acquisitions of raw materials and inventory and sales of inventory, in each case in the
ordinary course of business consistent with past practice; and
(x) neither the Company nor any of its Subsidiaries will enter into an agreement, contract,
commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
Section 5.2 No Solicitation by the Company.
(a) The Company shall immediately cease any discussions or negotiations with any parties that
may be ongoing with respect to a Takeover Proposal (as hereinafter defined) and shall seek to have
returned to the Company any confidential information that has been provided in any such discussions
or negotiations. From the date hereof, the Company shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its officers, directors or employees or
any Affiliate, investment banker, financial advisor, attorney, accountant or other representative
retained by it or any of its Subsidiaries to, directly or indirectly, (i) solicit, initiate or
knowingly encourage (including by way of furnishing information which has not been previously
publicly disseminated), or take any other action designed to facilitate, any inquiries or the
making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover
Proposal or (ii) participate in any discussions or negotiations regarding any Takeover Proposal;
provided, however, that if, following the receipt of a Superior Proposal (as
hereinafter defined) or a proposal which is reasonably expected to lead to a Superior Proposal that
in either case was unsolicited and made after the date hereof in circumstances not otherwise
involving a breach of this Agreement, the Company Board determines in good faith, after considering
applicable provisions of state law and after consultation with outside counsel, that a failure to
do so would be inconsistent with its fiduciary duties under applicable law, the Company may, in
response to such Takeover Proposal and subject to compliance with Section 5.2(c), (A)
request information from the party making such Takeover Proposal for the sole purpose of the
Company Board informing itself about the Takeover Proposal that has been made and the party that
made it, (B) furnish information with respect to the Company to the party making such Takeover
Proposal pursuant to a customary confidentiality agreement, provided that (1) such
confidentiality agreement may not include any provision calling for an exclusive right to negotiate
with the Company and (2) the Company advises Parent of all such nonpublic information delivered to
such person concurrently with its delivery to the requesting party, and (C) participate in
negotiations with such party regarding such Takeover Proposal. It is agreed that any violation of
the restrictions set forth in the preceding sentence by any executive officer, director or
investment banker, attorney or other advisor or representative of the Company or any of its
Subsidiaries shall be deemed to be a breach of this Section 5.2(a) by the Company. The
Company agrees not to waive or fail to enforce any provision of any confidentiality or standstill
agreement to which it is a party relating to a potential or actual Takeover Proposal.
(b) Except as expressly permitted in this Section 5.2(b), neither the Company Board
nor any committee thereof shall (i) withdraw or modify, or propose publicly to withdraw or modify,
in a manner adverse to Parent, the approval, determination of advisability, or
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recommendation by the Company Board or such committee of this Agreement, the Merger, and the
other Transactions, (ii) approve, determine to be advisable, or recommend, or propose publicly to
approve, determine to be advisable, or recommend, any Takeover Proposal or (iii) cause the Company
to enter into any letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an “Acquisition Agreement”) related to any Takeover Proposal (other than a
customary confidentiality agreement referred to in clause (B) of the proviso to Section
5.2(a)). Notwithstanding the foregoing, in the event that the Company Board determines in good
faith, in response to a Superior Proposal that was unsolicited and made after the date hereof in
circumstances not otherwise involving a breach of this Agreement, after considering applicable
provisions of state law and after consultation with outside counsel, that the failure to do so
would be inconsistent with its fiduciary duties under applicable law, the Company Board may
(subject to compliance with this sentence and to compliance with Sections 5.2(a) and
5.2(c)) (x) withdraw or modify its approval, determination of advisability, or
recommendation of this Agreement, the Merger, and the other Transactions or (y) approve, determine
to be advisable, or recommend a Superior Proposal, or (z) cause the Company to enter into an
Acquisition Agreement, provided, however, that any actions described in clause (x),
(y) or (z) may be taken only at a time that is after the second business day following Parent’s
receipt of written notice from the Company advising Parent that the Company Board has received a
Superior Proposal, specifying the material terms and conditions of such Superior Proposal,
identifying the person making such Superior Proposal and providing notice of the determination of
the Company Board of what actions described in clause (x), (y) or (z) the Company Board has
determined to take, and further provided, that the action described in clause (z)
may be taken only upon compliance by the Company with Section 8.1(c) and Section
8.2(b). In addition, and notwithstanding anything in this Agreement to the contrary, the
Company Board may at any time (other than in connection with a Takeover Proposal) withdraw or
modify its approval, determination of advisability, or recommendation of this Agreement, the
Merger, and the other Transactions in the event it determines in good faith, after considering
applicable provisions of state law and after consultation with outside counsel, that any such
withdrawal or modification of its approval, determination of advisability or recommendation is
required in order for the Company Board to comply with its fiduciary duties under applicable law,
provided that the Company has provided to Parent five (5) Business Days’ prior written
notice advising Parent that it intends to take such action and specifying, in reasonable detail,
the reasons for such action.
(c) In addition to the obligations of the Company set forth in Section 5.2(a) and
5.2(b), the Company shall promptly advise Parent orally and in writing of any request for
confidential information in connection with a Takeover Proposal or of any Takeover Proposal, the
material terms and conditions of such request or the Takeover Proposal and the identity of the
person making such request or Takeover Proposal and shall keep Parent promptly advised of all
significant developments which could reasonably be expected to culminate in the Company Board
withdrawing, modifying or amending its recommendation of this Agreement, the Merger and the other
Transactions, or in exercising any of its other rights under Section 5.2(a) or (b).
(d) Nothing contained in this Section 5.2 or Section 6.6 shall prohibit the
Company or the Company Board from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act or from making any other
disclosure to the Company’s shareholders if, in the Company Board’s determination in good faith
after consultation with outside counsel, the failure so to disclose
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would be inconsistent with its obligations under applicable Law; provided,
however, neither the Company nor the Company Board nor any committee thereof shall, except
as in accordance with Section 5.2(b), withdraw or modify, or propose publicly to withdraw
or modify, its approval, determination of advisability or recommendation of this Agreement, the
Merger and the other Transactions or approve, determine to be advisable, or recommend, or propose
publicly to approve, determine to be advisable, or recommend, a Takeover Proposal.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of Proxy Statement.
(a) As soon as reasonably practicable after the date of this Agreement, the Company shall file
with the SEC the Proxy Statement. The Company will use reasonable efforts to cause the Proxy
Statement to be disseminated to the holders of the Shares, as and to the extent required by
applicable federal securities Laws. Subject to Section 5.2, the Proxy Statement will
contain the Company Recommendation and the Company shall use reasonable best efforts to obtain the
Shareholder Approval.
(b) Parent and Merger Sub will provide for inclusion or incorporation by reference in the
Proxy Statement of all required information relating to Parent or its Affiliates. Parent and its
counsel shall be given the opportunity to review and comment on the Proxy Statement before it is
filed with the SEC. In addition, the Company will provide Parent and its counsel, in writing, any
comments or other communications, whether written or oral, that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the Proxy Statement promptly
after the receipt of such comments or other communications, and the provide Parent and its counsel
with the opportunity to review and comment on the Company’s proposed response thereto. The Company
will respond promptly to any such comments from the SEC or its staff.
(c) Each of the Company, Parent and Merger Sub agrees to promptly (i) correct any information
provided by it specifically for use in the Proxy Statement if and to the extent that such
information shall have become false or misleading in any material respect and (ii) supplement the
information provided by it specifically for use in the Proxy Statement to include any information
that shall become necessary in order to make the statements in the Proxy Statement, in light of the
circumstances under which they were made, not misleading. The Company further agrees to cause the
Proxy Statement as so corrected or supplemented promptly to be filed with the SEC and to be
disseminated to the holders of the Shares, in each case as and to the extent required by applicable
federal securities Laws.
Section 6.2 Shareholders Meeting.
(a) The Company shall take all actions in accordance with applicable Law, its constituent
documents and the rules of the New York Stock Exchange to duly call, give notice of, convene and
hold a special meeting of the Company’s shareholders (including any adjournment or postponement
thereof, the “Special Meeting”) for the purpose of considering and
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taking action upon the adoption of this Agreement as soon as practicable following the date
hereof. The Company shall include in the Proxy Statement the recommendation of the Company Board
that the Company shareholders vote in favor of the approval of the Merger and the adoption of this
Agreement, unless such recommendation has been withdrawn, or as such recommendation has been
modified or amended, in each case in accordance with Section 5.2. Notwithstanding anything
to the contrary contained in this Agreement, (x) the Company in its sole discretion may adjourn or
postpone the Special Meeting after consultation with Parent, to the extent necessary to ensure that
any required supplement or amendment to the Proxy Statement is provided to the shareholders of the
Company within a reasonable amount of time in advance of the Special Meeting, and (y) the Company
shall adjourn or postpone the Special Meeting if, as of the time for which the Special Meeting is
originally scheduled (as set forth in the Proxy Statement), there are insufficient Shares of Common
Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the
business of the Special Meeting.
(b) Parent shall 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 6.3 Reasonable Best Efforts. Subject to Section 6.3(e):
(a) Prior to the Closing, Parent, Merger Sub and the Company shall use their respective
reasonable best 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 any applicable Laws to consummate and make
effective in the most expeditious manner possible the Transactions including (i) the preparation
and filing of all forms, registrations and notices required to be filed to consummate the
Transactions, (ii) the satisfaction of the other parties’ conditions to consummating the
Transactions, (iii) taking all reasonable actions necessary to obtain (and cooperation with each
other in obtaining) any consent, authorization, Order or approval of, or any exemption by, any
third party, including any Governmental Entity (which actions shall include furnishing all
information required under the HSR Act and in connection with approvals of or filings with any
other Governmental Entity) required to be obtained or made by Parent, Merger Sub, the Company or
any of their respective Subsidiaries in connection with the Transactions or the taking of any
action contemplated by the Transactions or by this Agreement, (iv) the execution and delivery of
any additional instruments necessary to consummate the Transactions and to fully carry out the
purposes of this Agreement. Additionally, each of Parent and the Company shall use all reasonable
best efforts to fulfill all conditions precedent to the Merger and shall not take any action after
the date of this Agreement that would reasonably be expected to materially delay the obtaining of,
or result in not obtaining, any permission, approval or consent from any Governmental Entity
necessary to be obtained prior to Closing.
(b) Prior to the Closing, each party shall promptly consult with the other parties to this
Agreement with respect to, provide any necessary information with respect to (and, in the case of
correspondence, provide the other parties (or their counsel) copies of), all filings made by such
party with any Governmental Entity or any other information supplied by such party to, or
correspondence with, a Governmental Entity in connection with this Agreement and the Transactions.
Each party to this Agreement shall promptly inform the other parties to this
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Agreement of any communication from any Governmental Entity regarding any of the Transactions.
If any party to this Agreement or any Affiliate of such parties receives a request for additional
information or documentary material from any Governmental Entity with respect to the Transactions,
then such party will use reasonable best efforts to make, or cause to be made, promptly and after
consultation with the other parties to this Agreement, an appropriate response in compliance with
such request. To the extent that transfers of any permits issued by any Governmental Entity are
required as a result of the execution of this Agreement or the consummation of the Transactions,
the parties hereto shall use reasonable best efforts to effect such transfers.
(c) The Company and Parent shall use reasonable best efforts to file, as promptly as
practicable, but in any event no later than fifteen Business Days after the date of this Agreement,
notifications under the HSR Act, and the Company and Parent shall use reasonable best efforts to
file, as promptly as practicable, any other filings and/or notifications under applicable Antitrust
Laws, and shall use reasonable best efforts to respond, as promptly as practicable, to any
inquiries received from the Federal Trade Commission and the Antitrust Division of the Department
of Justice for additional information or documentation and to respond, as promptly as practicable,
to all inquiries and information requests received from any state Attorney General or other
Governmental Entity in connection with antitrust matters.
(d) Each of Parent and the Company shall use all reasonable best efforts to resolve such
objections, if any, as may be asserted by any Governmental Entity with respect to the Transactions
under the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the Federal Trade
Commission Act, as amended, and any other United States federal or state or foreign Laws that are
designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization
or restraint of trade (collectively, “Antitrust Laws”). In connection therewith, if any Action is
instituted (or threatened to be instituted) challenging any of the Transactions as violative of any
Antitrust Laws, each of Parent and the Company shall cooperate and use all reasonable best efforts
to vigorously contest and resist any such Action, and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction or other order whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents, or restricts consummation of the Merger
or any other Transactions, including by vigorously pursuing all available avenues of administrative
and judicial appeal unless, by mutual agreement, Parent and the Company decide that litigation is
not in their respective best interests. Notwithstanding the foregoing or any other provision of
this Agreement, nothing in this Section 6.3(d) shall limit the right of any party hereto to
terminate this Agreement pursuant to Section 8.1, so long as such party hereto has, up to
the time of termination, complied in all material respects with its obligations under this
Section 6.3(d). Each of Parent and the Company shall use all reasonable best efforts to
take such action as may be required to cause the expiration of the notice periods under the HSR Act
or other Antitrust Laws with respect to the Transactions as promptly as possible after the
execution of this Agreement.
(e) Notwithstanding Section 6.3(a) through (d) or any other provision of this
Agreement to the contrary, in no event shall Parent or its Subsidiaries (including Merger Sub) or
Affiliates be required to agree to (i) any prohibition of or limitation on its or their ownership
(or any limitation that would materially affect its or their operation) of any portion of their
respective businesses or assets, including after giving effect to the Merger, (ii) divest, hold
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separate or otherwise dispose of any portion of its or their respective businesses or assets,
including after giving effect to the Merger, (iii) any limitation on its or their ability to effect
the Merger, or the ability of the Company (or Merger Sub) or its or their respective Subsidiaries
to acquire or hold or exercise full rights of ownership of any capital stock of any Subsidiary of
the Company, or (iv) any other limitation on its or their ability to effectively control their
respective businesses or any limitation that would materially affect its or their ability to
control their respective operations, including after giving effect to the Merger (any such action
or limitation described in clauses (i) through (iv) of this Section 6.3(e), a
“Restriction”), other than Restrictions, individually or in the aggregate with all other
Restrictions, for which the aggregate fair value of all businesses or assets (including stock)
affected, prior to giving effect to the Merger, (x) would not exceed $50,000,000 in the case of the
Company and its Subsidiaries and Affiliates, taken as a whole, and (y) would not exceed $50,000,000
in the case of Parent and its Subsidiaries and Affiliates, taken as a whole.
Section 6.4 Notification of Certain Matters. Subject to applicable Law, the Company
shall give prompt notice to Merger Sub and Parent, and Merger Sub and Parent shall give prompt
notice to the Company of (a) the occurrence or non-occurrence of any event whose occurrence or
non-occurrence would be reasonably likely to cause either (i) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect at any time from the
date of this Agreement to the Effective Time or (ii) any condition to the Merger to be unsatisfied
in any material respect at the Effective Time and (b) any material failure of the Company, Merger
Sub or Parent, as the case may be, or any officer, director, employee, agent or representative of
the Company, Merger Sub or Parent as applicable, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it under this Agreement; provided,
however, that the delivery of any notice pursuant to this Section 6.4 shall not
limit or otherwise affect the remedies available under this Agreement to the party receiving such
notice.
Section 6.5 Access; Confidentiality. Subject to the Confidentiality Agreement and
applicable Law relating to the sharing of information, the Company agrees to provide, and shall
cause its Subsidiaries to provide, Parent and its representatives, from time to time prior to the
earlier of the Effective Time or the termination of this Agreement, reasonable access during normal
business hours to (i) the Company’s and its Subsidiaries’ respective properties, books, contracts,
commitments, personnel and records, (ii) such other information as Parent shall reasonably request
with respect to the Company and its Subsidiaries and their respective businesses, financial
condition and operations. Parent shall and shall cause Parent’s Affiliates and representatives to
keep confidential any non-public information received from the Company, its Affiliates or
representatives, directly or indirectly, pursuant to this Section 6.5 in accordance with
the Confidentiality Agreement.
Section 6.6 Publicity. Neither the Company, Parent nor any of their respective
Affiliates shall issue or cause the publication of any press release or other announcement with
respect to this Agreement or the Transactions without the prior consultation of the other party and
giving the other party the opportunity to review and comment on such press release or other
announcement, if practicable, except as such party reasonably believes, after receiving the advice
of outside counsel and after informing all other parties to this Agreement, is required by Law or
by any listing agreement with or rules of any applicable national securities exchange, trading
market or listing authority and except as may be requested by a Governmental Entity.
- 29 -
Section 6.7 Indemnification.
(a) From and after the Effective Time, Parent shall, and shall cause the Surviving Corporation
to, indemnify, defend and hold harmless each person who is now, or has been at any time prior to
the date of this Agreement or who becomes such prior to the Effective Time, an officer or director
of the Company or any of its Subsidiaries (the “Indemnified Parties”) against (i) any and all
losses, claims, damages, costs, expenses, fines, liabilities or judgments or amounts that are paid
in settlement with the approval of the indemnifying party of or in connection with any claim,
action, suit, proceeding or investigation based in whole or in part on or arising in whole or in
part out of the fact that such person is or was a director or officer of the Company or any of its
Subsidiaries whether pertaining to any action or omission existing or occurring at or prior to the
Effective Time and whether asserted or claimed prior to, or at or after, the Effective Time
(“Indemnified Liabilities”), and (ii) all Indemnified Liabilities based in whole or in part on, or
arising in whole or in part out of, or pertaining to this Agreement or the Transactions;
provided, however, that, in the case of the Surviving Corporation, such
indemnification shall only be to the fullest extent a corporation is permitted under Ohio Law to
indemnify its own directors and officers, and in the case of indemnification by Parent, Parent’s
indemnification shall not be limited by Ohio Law, but Parent shall not be required to indemnify
Indemnified Parties if a final, non-appealable judgment or adjudication in an action against
Indemnified Parties by a claimant (not including an action brought by Parent, Surviving
Corporation, or any insurer of either) establishes: (A) that the acts or omissions of Indemnified
Parties were the result of deliberate criminal or fraudulent acts by the Indemnified Party seeking
indemnification; or (B) that the claim against Indemnified Party arises out of, is based upon, or
is attributable to the gaining in fact of any financial profit or other advantage to which the
Indemnified Party was not legally entitled. Parent, Merger Sub, and the Surviving Corporation, as
the case may be, will pay all expenses of each Indemnified Party in advance of the final
disposition of any such action or proceeding, but in the case of Merger Sub and the Surviving
Corporation only to the fullest extent permitted by law upon receipt of an undertaking of the kind
described in Section 1701.13(E)(5) of Ohio Law and in the form provided for in the indemnification
agreements with Company directors and officers in effect as of the date of this Agreement. Without
limiting the foregoing, in the event any such claim, action, suit, proceeding or investigation is
brought against any Indemnified Party (whether arising before or after the Effective Time), (i) the
Indemnified Parties may retain counsel satisfactory to them and reasonably satisfactory to Parent,
(ii) Parent shall, or shall cause the Surviving Corporation to, pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements therefor are received,
and (iii) Parent shall, and shall cause the Surviving Corporation to, use all reasonable efforts to
assist in the vigorous defense of any such matter, provided that none of Parent, Merger Sub
or the Surviving Corporation shall be liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be unreasonably withheld or delayed. Any
Indemnified Party wishing to claim indemnification under this Section 6.7, 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 6.7 except to the extent such failure
materially prejudices such party), and shall deliver to the Surviving Corporation (but not Parent)
an undertaking of the kind described in Section 1701.13(E)(5) of
Ohio Law and in the form provided for in the indemnification agreements with Company directors
and officers in effect as of the date of this Agreement.
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(b) The articles of incorporation and regulations of the Surviving Corporation shall contain
the provisions with respect to indemnification set forth in the Second Amended and Restated
Articles of Incorporation and Second Amended and Restated Regulations of the Company, which
provisions shall not be amended, modified or otherwise repealed for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder as of the Effective
Time of any individual who at the Effective Time is an Indemnified Party, unless such modification
is required after the Effective Time by Law and then only to the minimum extent required by such
Law.
(c) The rights of each Indemnified Party under this Section 6.7 shall be in addition
to any rights such individual may have under the Second Amended and Restated Articles of
Incorporation and Second Amended and Restated Regulations (or other governing documents) of the
Company and any of its Subsidiaries, under Ohio Law or any other applicable Laws or under any
agreement of any Indemnified Party with the Company or any of its Subsidiaries. These rights shall
survive consummation of the Merger and are intended to benefit, and shall be enforceable by, each
Indemnified Party.
(d) In the event that the Parent or Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other Person and is not 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, proper provision will be made so that the successors and assigns of the Surviving Corporation
assume the obligations set forth in this Section 6.7.
Section 6.8 Merger
Sub Compliance. Parent shall cause Merger Sub to comply with all of its
obligations under or related to this Agreement.
Section 6.9 Employee Matters.
(a) For a period of two years from the Closing Date, Parent or the Surviving Corporation shall
provide, or cause to be provided, compensation and benefits to the employees and former employees
of the Company and its Subsidiaries (the “Company Employees”) that are no less favorable, in the
aggregate, than the compensation and benefits that are provided to the Company Employees
immediately prior to the Effective Time; provided, that the foregoing obligation shall not
restrict Parent and the Surviving Corporation from making changes that (i) are consistent with
changes currently planned or contemplated by the Company, (ii) are in response to business
conditions which may exist at the time of such changes or (iii) are collectively bargained for.
Parent shall, and shall cause the Surviving Corporation to, honor in accordance with their terms
all Company Plans; provided, however, that Parent or the Surviving Corporation may
amend, modify or terminate any individual Company Plan in accordance with its terms and applicable
Law (including obtaining the consent of the other parties to and beneficiaries of such Company Plan
to the extent required thereunder). Notwithstanding the foregoing or anything else in this
Agreement to the contrary, the Surviving Corporation and its Subsidiaries shall not, after the
Effective Time, provide any form of equity-based compensation, including, without limitation,
options to purchase shares of capital stock in the Surviving Corporation or any of its
Subsidiaries; provided that any equity-
based compensation provided by the Company and its Subsidiaries pursuant to the Company Plans
immediately prior to the
- 31 -
Effective Time (including but not limited to long term incentive compensation grants or awards)
shall be taken into account in determining whether the compensation and benefits provided by Parent
and the Surviving Corporation are less favorable than those provided by the Company for purposes of
the first sentence of this Section 6.9(a).
(b) For purposes of all employee benefit plans (as defined in Section 3(3) of ERISA) and other
employment agreements, arrangements and policies of the Surviving Corporation under which an
employee’s benefits depends, in whole or in part, on length of service, credit will be given to
current employees of the Company and its Subsidiaries for service with the Company or any of its
Subsidiaries or predecessors prior to the Effective Time, provided that such crediting of service
does not result in duplication of benefits.
(c) The provisions of this Section 6.9 are solely for the benefit of the respective
parties to this Agreement and nothing in this Section 6.9, express or implied, shall confer
upon any Company Employee, or legal representative or beneficiary thereof, any rights or remedies,
including any right to employment or continued employment for any specified period, or compensation
or benefits of any nature or kind whatsoever under this Agreement.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions, any and all of which may be waived
in whole or in part by the Company, Parent and Merger Sub to the extent permitted by applicable
Law:
(a) Shareholder Approval. The Shareholder Approval shall have been obtained.
(b) Governmental Approvals. (i) The waiting period (including any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have expired or been
terminated, and (ii) with respect to non-U.S. jurisdictions where any merger control consents or
approvals are deemed necessary in the reasonable opinion of both the Company and Parent, all
notifications and filings have been made, all appropriate waiting periods (including extensions
thereof) have expired or been terminated and all clearances and approvals have been granted (or
been deemed in accordance with the relevant Law to have been granted) by the relevant Governmental
Entity on terms consistent with Section 6.3(e).
(c) No Injunctions or Restraints. No Order or Law, entered, enacted, promulgated,
enforced or issued by any court of competent jurisdiction, or any other Governmental Entity, or
other legal restraint or prohibition (collectively, “Restraints”) shall be in effect preventing the
consummation of the Merger; provided, however, that, subject to Section
6.3(e), each of the parties to this Agreement shall have used its reasonable best efforts to
prevent the entry of any such Restraints and to appeal as
promptly as possible any such Restraints that may be entered to the extent required by and
subject to Section 6.3.
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Section 7.2 Conditions 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 waiver by
Parent and Merger Sub, on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties.
(i) The representations and warranties of the Company contained in this Agreement shall
be true and correct at and as of the date of this Agreement and at and as of the Closing
(without regard to any qualifications therein as to materiality or Material Adverse Effect),
as though made at and as of such time (or, if made as of a specific date, at and as of such
date), except, in each case, for such failures to be true and correct as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(ii) The representations and warranties of the Company contained in Sections
3.4(a) and 3.18 of this Agreement shall be true and correct in all respects
(except, in the case of Section 3.4(a), for de minimis inaccuracies therein) at and
as of the date of this Agreement and at and as of the Closing (without regard to any
qualifications therein as to materiality or Material Adverse Effect), as though made at and
as of such time (or, if made as of a specific date, at and as of such date).
(b) Performance of Obligations of the Company. The Company shall have performed or
complied with in all material respects (or with respect to any covenant or agreement qualified by
materiality or Material Adverse Effect, in all respects) the covenants and agreements contained in
this Agreement to be performed or complied with by it prior to or on the Closing Date.
(c) No Orders or Laws. No Order or Law shall have been promulgated, entered,
enforced, enacted, issued or applicable to the Merger by any Governmental Entity which would impose
or require any Restriction, and no action or proceeding by any Governmental Entity shall be pending
which seeks any Restriction, other than Restrictions, individually or in the aggregate with all
other Restrictions, for which the aggregate fair value of all businesses or assets (including
stock) affected, prior to giving effect to the Merger, (x) would not exceed $50,000,000 in the case
of the Company and its Subsidiaries and Affiliates, taken as a whole, and (y) would not exceed
$50,000,000 in the case of Parent and its Subsidiaries and Affiliates, taken as a whole.
Notwithstanding the foregoing, any action or proceeding by a Governmental Entity that seeks any
Restriction which action or proceeding is pending as of the date immediately preceding the Outside
Date shall not be taken into account when determining whether the conditions set forth in this
paragraph have been satisfied as of such date.
(d) Officer’s Certificate. The Company shall have furnished Parent with a certificate
dated the Closing Date signed on its behalf by its chief executive officer and chief financial
officer to the effect that the conditions set forth in Section 7.2(a) and Section
7.2(b) have been satisfied.
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Section 7.3 Conditions to Obligations of the Company. The obligation of the Company
to effect the Merger is further subject to the satisfaction, or waiver by the Company, on or prior
to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and
Merger Sub contained in this Agreement shall be true and correct at and as of the date of this
Agreement and at and as of the Closing (without regard to any qualifications therein as to
materiality or material adverse effect), as though made at and as of such time (or, if made as of a
specific date, at and as of such date), except, in each case, for such failures to be true and
correct as would not reasonably be expected to prevent or otherwise have a material adverse effect
on the ability of Parent to consummate the Merger.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger
Sub shall have performed or complied with in all material respects (or with respect to any covenant
or agreement qualified by materiality or material adverse effect, in all respects) the covenants
and agreements contained in this Agreement to be performed or complied with by it prior to or on
the Closing Date.
(c) Officer’s Certificate. Each of Parent and Merger Sub shall have furnished the
Company with a certificate dated the Closing Date signed on its behalf by its chief executive
officer (or chief legal officer in the case of Parent) and chief financial officer to the effect
that the conditions set forth in Section 7.3(a) and Section 7.3(b) have been
satisfied.
Section 7.4 Frustration of Closing Conditions. Neither Parent or Merger Sub nor the
Company may rely on the failure of any condition set forth in Section 7.1, Section
7.2 or Section 7.3, as the case may be, to be satisfied to excuse it from its
obligation to effect the Merger if such failure was caused by such party’s failure to comply with
its obligations to consummate the Merger and the other Transactions to the extent required by and
subject to Section 6.3.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger may be abandoned at any time prior
to the Effective Time (notwithstanding any Shareholder Approval):
(a) by mutual written consent of Parent, Merger Sub and the Company;
(b) by either Parent or the Company if:
(i) the Merger has not been consummated on or before September 15, 2011 (the “Outside
Date”); provided, however, that the right to terminate this Agreement
pursuant to this Section 8.1(b)(i) shall not be available to any party whose breach
of any provision of this Agreement results in the failure of the Merger to be consummated by
such time; provided further, however, that,
if, on the Outside Date, any of the conditions to the Closing set forth in Section
7.1(b) shall not have been fulfilled but all other
- 34 -
conditions to the Closing either have been fulfilled or are then capable of being fulfilled,
then the Outside Date shall, without any action on the part of the parties hereto, be
extended day-by-day for each day during which any of the conditions set forth in Section
7.1(b) remain unfulfilled; provided further, however, that the Outside
Date shall not be extended past October 14, 2011;
(ii) a permanent injunction or other Order which is final and nonappealable shall have
been issued or taken restraining or otherwise prohibiting consummation of the Merger or any
of the other Transactions (any such injunction or Order, a “Final Order”); provided,
however, that the party seeking to terminate this Agreement pursuant to this
Section 8.1(b)(ii) shall have used all reasonable best efforts to prevent the entry
of such permanent injunction or other Order to the extent required by and subject to
Section 6.3; or
(iii) if the Special Meeting (including any adjournments and postponements thereof)
shall have concluded without the Shareholder Approval having been obtained by reason of the
failure to obtain the required vote of the holders of Shares, provided,
however, that the Company’s right to terminate this Agreement pursuant to this
Section 8.1(b)(iii) is subject to the Company’s compliance with clause (y) of the
third sentence of Section 6.2(a);
(c) by the Company prior to the receipt of the Shareholder Approval, if the Company
concurrently enters into a definitive agreement with respect to a Superior Proposal;
provided that the Company shall have complied with all provisions of Section 5.2
and shall have previously paid or shall concurrently with such termination pay the fees due under
Section 8.2(b);
(d) by Parent, if the Company Board or any committee thereof shall have withdrawn or modified,
or proposed publicly to withdraw or modify, in a manner adverse to Parent, the approval,
determination of advisability or recommendation of this Agreement, the Merger and the other
Transactions, or approved, determined to be advisable or recommended, or proposed publicly to
approve, determine to be advisable or recommend, any Takeover Proposal, or the Company Board or any
committee thereof shall have resolved to take any of the foregoing actions;
(e) by Parent, if the Company breaches or fails to perform or comply with any of its
representations, warranties, agreements or covenants contained in this Agreement, which breach or
failure to perform or comply (i) would give rise to the failure of a condition set forth in
Section 7.2(a) or Section 7.2(b) and (ii) cannot be cured by the Outside Date
(provided that Parent is not then in material breach of any representation, warranty, agreement or
covenant contained in this Agreement); or
(f) by the Company, if Parent or Merger Sub breaches or fails to perform or comply with any of
its representations, warranties, agreements or covenants contained in this Agreement, which breach
or failure to perform or comply (i) would give rise to the failure of a condition set forth in
Section 7.3(a) or Section 7.3(b) and (ii) cannot be cured by the Outside
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Date (provided that the Company is not then in material breach of any representation,
warranty, agreement or covenant contained in this Agreement).
(g) A terminating party shall provide written notice of termination to the other parties
specifying with particularity the reason for such termination. If more than one provision of this
Section 8.1 is available to a terminating party in connection with a termination, a
terminating party may rely on any and all available provisions in this Section 8.1 for any
such termination.
Section 8.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 8.1, this Agreement shall
become void and of no effect with no liability on the part of any party (or any shareholder,
director, officer, employee, agent, consultant or representative of such party) to the other party
hereto; provided, however, that if such termination shall result from the (i)
failure of either party to fulfill a condition to the performance of the obligations of the other
party or (ii) failure of either party to perform an agreement or covenant hereof, such party shall
not be relieved of any liability to the other party as a result of such failure or breach;
provided further, however, that the provisions of Section 6.6, this
Section 8.2, Article IX and Article X hereof and the provisions of the
Confidentiality Agreement shall survive such termination.
(b) If this Agreement is terminated (i) by either Parent or the Company pursuant to the
provisions of Section 8.1(b)(i), Section 8.1(b)(iii) or Section 8.1(b)(ii),
but in the case of a termination pursuant to Section 8.1(b)(ii), only if the applicable
Final Order is based on the existence of a Takeover Proposal (whether or not modified after it is
first made), and, in the case of any termination under this clause (i), (A) prior to such
termination a Takeover Proposal shall have been made known to the Company or its shareholders or
any Person shall have publicly announced an intention (whether or not conditional) to make a
Takeover Proposal and (B) at any time on or prior to the 12-month anniversary of such termination
the Company or any of its Subsidiaries enters into a definitive agreement with respect to any
Takeover Proposal or the transactions contemplated by any Takeover Proposal are consummated
(provided that solely for purposes of this Section 8.2(b)(i)(B), the term “Takeover
Proposal” shall have the meaning set forth in the definition of Takeover Proposal except that all
references to 10% shall be deemed references to 30%), or (ii) by Parent pursuant to the provisions
of Section 8.1(d), or by the Company pursuant to the provisions of Section 8.1(c),
the Company shall pay Parent the Termination Fee by wire transfer (to an account designated by
Parent) in immediately available funds (x) in the case of clause (i) of this Section
8.2(b), upon the earlier of entering into such definitive agreement with respect to a Takeover
Proposal or consummation of the transactions contemplated by a Takeover Proposal, and (y) in the
case of clause (ii) of this Section 8.2(b), prior to or concurrently with such termination.
“Termination Fee” shall mean a cash amount equal to $200,000,000.
(c) The Company acknowledges that the agreements contained in Section 8.2(b) are an
integral part of the Transactions, and that, without these agreements, Parent and Merger Sub would
not enter into this Agreement; accordingly, if the Company fails to pay in a timely manner any
amount due pursuant to Section 8.2(b) and, in order to obtain such payment, Parent or
Merger Sub commences a claim, action, suit or other proceeding that results in a
- 36 -
judgment against the Company, the Company shall pay to Parent interest on such amount from and
including the date payment of such amount was due to but excluding the date of actual payment at
the prime rate set forth in the Wall Street Journal in effect on the date such payment was required
to be made plus 1%, together with reasonable legal fees and expenses incurred in connection with
such claim, suit, proceeding or other action.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Waivers. Subject to applicable Law, and in accordance with
the immediately following sentence, this Agreement may be amended by the parties hereto by action
taken or authorized by or on behalf of their respective boards of directors, at any time prior to
the Closing Date, whether before or after adoption of this Agreement by the shareholders of the
Company and Merger Sub. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto. At any time prior to the Effective Time, any party hereto may (i)
extend the time for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties by the other party
contained herein or in any document delivered pursuant hereto, and (iii) subject to the
requirements of applicable Law, waive compliance by the other party with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound thereby. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
Section 9.2 Non-survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument or other document
delivered pursuant to this Agreement shall survive after the Effective Time.
Section 9.3 Expenses. All fees, costs and expenses (including all legal, accounting,
broker, finder or investment banker fees) incurred in connection with this Agreement and the
Transactions are to be paid by the party incurring such fees, costs and expenses.
Section 9.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and sent by facsimile, by
nationally recognized overnight courier service or by registered mail and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this Section 9.4
prior to 5:00 p.m. (New York City time) on a Business Day and a copy is sent on such Business Day
by nationally recognized overnight courier service, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Section 9.4 later than 5:00 p.m. (New York time) on any date and
earlier than 12 midnight (New York City time) on the following date and a copy is sent no later
than such date by nationally recognized overnight courier service, (iii) when received, if sent by
nationally recognized overnight courier service (other than in the cases of clauses (i) and (ii)
above), or (iv) upon actual receipt by the party to whom such notice is required to be given if
sent by registered mail. The address for such notices and communications shall be as follows:
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| (a) | if to Parent or Merger Sub, to: | ||
| Berkshire Hathaway Inc. 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000 Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000 Attention: Xxxxxx X. Xxxxxxx |
|||
| with a copy to: | |||
| Xxxxxx, Xxxxxx & Xxxxx, LLP 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxxxxx, Xxxxxxxxxx 00000 Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000 Attention: Xxxxxx X. Xxxxxx, Esq. Xxxx Xxx Xxxx, Esq. |
|||
| (b) | If to the Company, to | ||
| The Lubrizol Corporation 00000 Xxxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxx 00000-0000 Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000 Attention: Xxxxxxx X. Day |
|||
| with a copy to: | |||
| Xxxxx Day Xxxxx Xxxxx 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxxx 00000 Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000 Attention: Xxxx X. Xxxxxx, Esq. Xxxxx X. Xxxxxxxxx, Esq. |
Section 9.5 Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original but all of which will constitute one instrument.
Section 9.6 Entire Agreement; No Third Party Beneficiaries. This Agreement (including
the schedules and annexes to this Agreement, including the Company Disclosure Letter) and the
Confidentiality Agreement (a) constitute the entire agreement and supersede all
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prior agreements and understandings, both written and oral, among the parties with respect to
the subject matter of this Agreement, and (b) except for the provisions in Section 6.7,
solely to the extent stated therein, is not intended to and shall not confer upon any Person other
than the parties to this Agreement and their permitted assigns any rights, benefits or remedies of
any nature whatsoever, other than (i) the right of the holders of Shares of the Company to receive
the Merger Consideration after the Closing (a claim with respect to which may not be made unless
and until the Effective Time shall have occurred) and (ii) the right of a party to this Agreement
on behalf of its security holders to pursue damages in the event of the other party’s willful and
material breach of this Agreement. For the avoidance of doubt, the rights granted pursuant to the
foregoing clause (ii) shall be enforceable only by the Company in its sole and absolute discretion,
on behalf of the holders of Shares of the Company.
Section 9.7 Severability. If any term or provision of this Agreement is held by a
court of competent jurisdiction or other Governmental Entity to be invalid, void, unenforceable or
against its regulatory policy, the remainder of the terms and provisions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, so long
as the economic and legal substance of the Transactions, taken as a whole, are not affected in a
manner materially adverse to any party hereto.
Section 9.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Ohio without giving effect to the principles of conflicts
of law of the Laws of the State of Ohio.
Section 9.9 Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned by any of the parties to this Agreement (whether
by operation of Law or otherwise) without the prior written consent of the other parties, except
that Merger Sub may assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any entity that is wholly owned, directly or indirectly, by Parent. Any
attempted assignment in violation of this Section 9.9 shall be void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
Section 9.10 Consent to Jurisdiction. Each of the parties hereto (i) consents to
submit itself to the personal jurisdiction of the state and federal courts of the State of Ohio in
the event that any dispute arises out of this Agreement or any of the Transactions, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (iii) agrees that it will not bring any action relating to this
Agreement or any of the Transactions in any other court. Each of the parties hereto irrevocably
and unconditionally waives (and agrees not to plead or claim) any objection to the laying of venue
of any dispute arising out of this Agreement or any of the Transactions in the state and federal
courts of the State of Ohio, or that any such dispute brought in any such court has been brought in
an inconvenient forum.
Section 9.11 Specific Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. The parties accordingly agree that the
parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and
- 39 -
to enforce specifically the terms and provisions of this Agreement in any federal court
located in the State of Ohio or a Ohio state court, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 9.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS.
ARTICLE X
DEFINITIONS; INTERPRETATION
Section 10.1 Cross References. Each of the following terms is defined in the section
set forth opposite such term.
| Defined Term | Section | |||
Acquisition Agreement |
5.2 | (b) | ||
Agreement |
Preamble | |||
Anti-Corruption Laws |
3.8 | (b) | ||
Antitrust Laws |
6.3 | (d) | ||
Book-Entry Shares |
2.1 | (a) | ||
Certificate of Merger |
1.3 | |||
Certificates |
2.1 | (a) | ||
Closing Date |
1.2 | |||
Common Stock |
3.4 | (a) | ||
Company |
Preamble | |||
Company Board |
3.2 | (a) | ||
Company Disclosure Letter |
Article III | |||
Company Earnings Guidance |
3.5 | (c) | ||
Company Employees |
6.8 | (a) | ||
Company Permits |
3.8 | (a) | ||
Company Plan |
3.12 | (a) | ||
Company Recommendation |
3.2 | (c) | ||
Company SEC Documents |
3.5 | (a) | ||
Confidentiality Agreement |
3.21 | |||
Covered Employees |
3.12 | (a) | ||
Deferred Compensation Plans |
2.3 | (d) | ||
Deferred Payment |
2.3 | (d) | ||
Dissenting Shares |
2.4 | (a) | ||
Effective Time |
1.3 | |||
ERISA |
3.12 | (a) | ||
Exchange Act |
3.3 | (a) | ||
Final Order |
8.1(b)(ii) | |||
Financial Advisors |
3.17 | |||
Financial Statements |
3.5 | (a) | ||
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| Defined Term | Section | |||
GAAP |
3.5 | (a) | ||
Governmental Entity |
3.3 | (a) | ||
HSR Act |
3.3 | (a) | ||
Indemnified Liabilities |
6.7 | (a) | ||
Indemnified Parties |
6.7 | (a) | ||
International Award |
2.3 | (b) | ||
International Equity Plans |
2.3 | (b) | ||
Material Contract |
3.9 | (a) | ||
Merger |
1.1 | |||
Merger Consideration |
2.1 | (a) | ||
Merger Sub |
Preamble | |||
Multiemployer Plan |
3.12 | (a) | ||
Non-U.S. Plan |
3.12 | (c) | ||
Option |
2.3 | (a) | ||
Option Cash Payment |
2.3 | (a) | ||
Outside Date |
8.1(b) | (i) | ||
Parent |
Preamble | |||
Paying Agent |
2.2 | (a) | ||
Payment Fund |
2.2 | (a) | ||
Proxy Statement |
3.10 | |||
Restraints |
7.1 | (c) | ||
Restriction |
6.3 | (e) | ||
Rights |
3.4 | (a) | ||
Securities Act |
3.5 | (a) | ||
Serial Preference Shares |
3.4 | (a) | ||
Serial Preferred Stock |
3.4 | (a) | ||
Settlement Payment |
2.3 | (b) | ||
Share Unit |
2.3 | (c) | ||
Share Unit Payment |
2.3 | (c) | ||
Shareholder Approval |
3.2 | (b) | ||
Shares |
Recitals | |||
SOX |
3.5 | (a) | ||
Special Meeting |
6.2 | (a) | ||
Surviving Corporation |
1.1 | |||
Takeover Statute |
3.19 | |||
Termination Fee |
8.2 | (b) | ||
Transactions |
2.2 | (e) | ||
Section 10.2 Certain Terms Defined. The following terms shall have the meanings set
forth below for purposes of this Agreement:
“Action” means any claim, action, suit, proceeding or investigation by or before any
Governmental Entity.
“Affiliates” has the meaning set forth in Rule 12b-2 of the Exchange Act.
- 41 -
“Business Day” means any day other than a Saturday, Sunday or a day on which banks in New
York, New York are authorized or obligated by Law or Order to close.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Stock Plans” means the Company’s 2010 Stock Incentive Plan (as amended November 9,
2010), the Company’s 2005 Stock Incentive Plan (as amended and restated February 22, 2010), and the
Company’s 1991 Stock Incentive Plan (as amended November 15, 2004).
“Encumbrance” means any security interest, pledge, mortgage, lien, charge, hypothecation,
option to purchase or lease or otherwise acquire any interest, conditional sales agreement, adverse
claim of ownership or use, title defect, easement, right of way, or other encumbrance of any kind.
“Environmental Laws” means all Laws relating to the protection of the environment, including
the ambient air, soil, surface water or groundwater, or relating to the protection of human health
from exposure to Materials of Environmental Concern.
“Environmental Permits” means all permits, licenses, registrations, and other authorizations
required under applicable Environmental Laws.
“ERISA Affiliate” means, with respect to any Person, any trade or business, whether or not
incorporated, that together with such Person would be deemed a “single employer” within the meaning
of Section 414 of the Code.
“Indebtedness” of any Person means (a) all indebtedness for borrowed money, (b) any other
indebtedness which is evidenced by a note, bond, debenture or similar instrument and (c) all
obligations under financing leases.
“Intellectual Property Rights” means United States or foreign intellectual property, including
(i) patents and patent applications, together with all reissues, continuations,
continuations-in-part, divisionals, provisionals, extensions and reexaminations thereof, (ii)
trademarks, service marks, logos, trade names, corporate names, trade dress, including all goodwill
associated therewith, and all applications, registrations and renewals in connection therewith,
(iii) copyrights and copyrightable works and all applications and registrations in connection with
any of the foregoing, (iv) inventions and discoveries (whether patentable or not), industrial
designs, trade secrets, confidential information and know-how, (v) computer software (including
databases and related documentation), (vi) uniform resource locators, web site addresses and
Internet domain names, and registrations therefor, (vii) moral and economic rights of authors and
inventors and (vii) all other proprietary rights whether now known or hereafter recognized in any
jurisdiction.
“IRS” means the Internal Revenue Service.
“Knowledge” means (i) with respect to Parent, the actual knowledge (without independent
inquiry or investigation) of the Chief Executive Officer, Chief Financial Officer and General
Counsel of Parent and (ii) with respect to the Company, the actual knowledge (without
- 42 -
independent inquiry or investigation) of the following executive officers of the Company:
Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and General Counsel.
“Law” means any law, statute, code, ordinance, regulation or rule of any Governmental Entity.
“Leased Real Property” means all material real property leased or subleased (whether as a
tenant or subtenant) by the Company or any Subsidiary of the Company.
“Material Adverse Effect” means, with respect to the Company, a material adverse effect on (i)
the ability of the Company to consummate the Merger, or (ii) the business, results of operations or
financial condition of the Company and its Subsidiaries, taken as a whole, except to the extent
such material adverse effect under this clause (ii) results from (A) any changes in general United
States or global economic conditions, (B) any changes in conditions generally affecting any of the
industries in which the Company and its Subsidiaries operate, except to the extent such changes in
conditions have a disproportionate effect on the Company and its Subsidiaries, taken as a whole,
relative to others in such industries, (C) any decline in the market price of the Common Stock, (D)
regulatory, legislative or political conditions or securities, credit, financial or other capital
markets conditions, in each case in the United States or any foreign jurisdiction, except to the
extent such conditions have a disproportionate effect on the Company and its Subsidiaries, taken as
a whole, relative to others in the industries in which the Company and any of its Subsidiaries
operate, (E) any failure, in and of itself, by the Company to meet any internal or published
projections, forecasts, estimates or predictions in respect of revenues, earnings or other
financial or operating metrics for any period (it being understood that the facts or occurrences
giving rise to or contributing to such failure may be deemed to constitute, or be taken into
account in determining whether there has been or will be a Material Adverse Effect), (F) the
execution and delivery of this Agreement or the public announcement or pendency of the Merger or
any of the other Transactions, including the impact thereof on the relationships, contractual or
otherwise, of the Company or any of its Subsidiaries with employees, labor unions, customers,
suppliers or partners, (G) any change in applicable Law, regulation or GAAP (or authoritative
interpretations thereof), (H) geopolitical conditions, the outbreak or escalation of hostilities,
any acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war,
sabotage or terrorism threatened or underway as of the date of this Agreement, except to the extent
such conditions or event have a disproportionate effect on the Company and its Subsidiaries, taken
as a whole, relative to others in the industries in which the Company and any of its Subsidiaries
operate, or (I) any hurricane, tornado, flood, earthquake or other natural disaster, except to the
extent such events have a disproportionate effect on the Company and its Subsidiaries, taken as a
whole, relative to others in the industries in which the Company and any of its Subsidiaries
operate.
“Materials of Environmental Concern” means any hazardous, acutely hazardous, or toxic
substance or waste defined or regulated as such under Environmental Laws, including the federal
Comprehensive Environmental Response, Compensation and Liability Act and the federal Resource
Conservation and Recovery Act.
“Ohio Law” means the Ohio General Corporation Law.
- 43 -
“Order” means any order, judgment, ruling, injunction, assessment, award, decree or writ of
any Governmental Entity.
“Owned Real Property” means all material real property reflected in the latest audited balance
sheet included in the Company SEC Documents as owned by the Company or any Subsidiary of the
Company or acquired after the date thereof (except for properties sold or otherwise disposed of
since the date thereof in the ordinary course of business).
“Permitted Encumbrances” means: (i) Encumbrances that relate to Taxes, assessments and
governmental charges or levies imposed upon the Company or any of its Subsidiaries that are not yet
due and payable or that are being contested in good faith by appropriate proceedings or for which
reserves have been established on the most recent financial statements included in the Company SEC
Documents, (ii) Encumbrances imposed by Law that relate to obligations that are not yet due and
have arisen in the ordinary course of business, (iii) pledges or deposits to secure obligations
under workers’ compensation Laws or similar legislation or to secure public or statutory
obligations, (iv) mechanics’, carriers’, workers’, repairers’ and similar Encumbrances imposed upon
the Company or any of its Subsidiaries arising or incurred in the ordinary course of business, (v)
Encumbrances that relate to zoning, entitlement and other land use and environmental Laws, (vi)
other imperfections or irregularities in title, charges, easements, survey exceptions, leases,
subleases, license agreements and other occupancy agreements, reciprocal easement agreements,
restrictions and other customary encumbrances on title to or use of real property, (vii) utility
easements for electricity, gas, water, sanitary sewer, surface water drainage or other general
easements granted to Governmental Entities in the ordinary course of developing or operating any
Site, (viii) any Laws affecting any Site, (ix) any utility company rights, easements or franchises
for electricity, water, steam, gas, telephone or other service or the right to use and maintain
poles, lines, wires, cables, pipes, boxes and other fixtures and facilities in, over, under and
upon any of the Sites, (x) any encroachments of xxxxxx, areas, cellar steps, trim and cornices, if
any, upon any street or highway; provided, however, that in the case of clauses (v)
through (x), none of the foregoing, individually or in the aggregate, materially adversely affect
the continued use of the property to which they relate in the conduct of the business currently
conducted thereon, and (xi) as to any Leased Real Property, any Encumbrance affecting the interest
of the lessor thereof.
“Person” means a natural person, sole proprietorship, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated society or
association, joint venture, Governmental Entity or other legal entity or organization.
“SEC” means the United States Securities and Exchange Commission.
“Site” means each location where the Company or any Subsidiary of the Company conducts
business, including each Owned Real Property and Leased Real Property.
“Subsidiary” means, with respect to any party, any foreign or domestic corporation or other
entity, whether incorporated or unincorporated, of which (a) 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 (b) at least a
majority of the securities or other equity interests having by their terms ordinary
- 44 -
voting power to elect a majority of the directors or others performing similar functions with
respect to such corporation or other entity is directly or indirectly owned or controlled by such
party or by any one or more of such party’s Subsidiaries, or by such party and one or more of its
Subsidiaries.
“Superior Proposal” means a bona fide written offer from any Person (other than Parent and its
Subsidiaries, Affiliates and representatives) for a direct or indirect acquisition or purchase of
50% or more of the consolidated assets (including equity interests in subsidiaries) of the Company
and its Subsidiaries, taken as a whole, or 50% or more of any class of equity securities of the
Company, any tender offer or exchange offer that if consummated would result in any person
beneficially owning 50% or more of any class of equity securities of the Company, or any merger,
consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries (other than the Transactions)
(A) which, considering all relevant factors, is more favorable to the Company and its shareholders
than the Merger, and (B) for which the third party has demonstrated that the financing for such
offer is fully committed or is reasonably likely to be obtained, in each case as determined by the
Company Board in its good faith judgment (after consulting with financial advisors and receiving
the advice of outside counsel).
“Takeover Proposal” means any inquiry, proposal or offer from any Person (other than Parent
and its Subsidiaries, Affiliates and representatives) relating to any direct or indirect
acquisition or purchase of 10% or more of the consolidated assets (including equity interests in
subsidiaries) of the Company and its Subsidiaries, taken as a whole, or 10% or more of any class of
equity securities of the Company, any tender offer or exchange offer that if consummated would
result in any Person beneficially owning 10% or more of any class of equity securities of the
Company, or any merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of its Subsidiaries,
other than the Transactions.
“Tax” or “Taxes” means all taxes of any kind, including those on or measured by or referred to
as income, gross receipts, sales, use, ad valorem, franchise, profits, license, value added,
property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority, domestic or foreign.
“Tax Return” or “Tax Returns” means all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and information returns and any amended tax
return related to Taxes.
Section 10.3 Other Definitional and Interpretative Provisions. The words “hereof,”
“herein” and “hereunder” and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. Terms defined in the
singular in this Agreement shall also include the plural and vice versa. The captions and headings
herein are included for convenience of reference only and shall be ignored in the construction or
interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles,
Sections, Exhibits and Schedules of this Agreement unless otherwise specified. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall
- 45 -
be deemed to be followed by the words “without limitation,” whether or not they are in fact
followed by those words or words of like import. The phrases “the date of this Agreement,” “the
date hereof” and phrases of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the Preamble. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase shall not mean
simply “if”. The word “will” shall be construed to have the same meaning as the word “shall”. The
term “or” is not exclusive. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. If any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
[Signatures on Following Page.]
- 46 -
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement and Plan of
Merger to be signed by their respective officers thereunto duly authorized as of the date first
written above.
| BERKSHIRE HATHAWAY INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| OHIO MERGER SUB, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | President | |||
| THE LUBRIZOL CORPORATION |
||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Chairman, President and Chief Executive Officer | |||
- 47 -
