Exhibit 2.2
CLOSING AGREEMENT
CLOSING AGREEMENT dated as of December 31, 1997 between
and among Ceridian Corporation, a Delaware corporation
("Seller"), General Dynamics Corporation, a Delaware
corporation ("Buyer"), General Dynamics Information Systems,
Inc., a Delaware corporation and a wholly-owned subsidiary of
Buyer (the "U.S. Acquisition Subsidiary"), and CDI
Acquisition Company, a Nova Scotia unlimited liability
company and a wholly-owned subsidiary of Buyer (the "Canadian
Acquisition Subsidiary").
Seller and Buyer are parties to an Asset Purchase
Agreement dated as of November 3, 1997 (the "Purchase
Agreement") relating to the acquisition by Buyer of the
assets and operations of Seller's Computing Devices
International division. All capitalized terms used without
definition in this Agreement will have the respective
meanings provided in the Purchase Agreement.
The parties have entered into this Agreement for the
purpose of evidencing their agreement and understanding
regarding certain matters relating to the consummation of the
transactions contemplated by the Purchase Agreement.
The parties hereto agree as follows:
1. Assignment to Acquisition Subsidiaries. In
accordance with the provisions of Section 9.7 of the Purchase
Agreement, Buyer hereby (a) assigns to the U.S. Acquisition
Subsidiary its rights under the Purchase Agreement with
respect to the Assets, other than the capital stock of
Computing Devices Canada Ltd., a corporation organized under
the laws of Canada and a wholly-owned subsidiary of Seller
("CD Canada"), and CD Plus S.A.R.L., a corporation organized
under the laws of France and a wholly-owned (excluding
nominee shares) subsidiary of Seller ("CD Plus"), and
delegates to the U.S. Acquisition Subsidiary its obligations
under the Purchase Agreement with respect to the Assumed
Liabilities (excluding any Assumed Liabilities relating to
any of the CD Int Subsidiaries) and (b) assigns to the
Canadian Acquisition Subsidiary its rights under the Purchase
Agreement with respect to the capital stock of CD Canada.
Buyer shall retain its rights under the Purchase Agreement
with respect to the capital stock of CD Plus. The parties
agree that the foregoing assignment and delegation shall not
terminate, limit or reduce in any manner Buyer's obligations
to Seller pursuant to the Purchase Agreement and the Buyer
shall continue to be primarily liable to Seller with respect
thereto.
2. Time of Closing. The parties agree that the Closing
shall be deemed for all purposes to have occurred as of 11:59
P.M., Central Standard Time, on December 31, 1997.
3. Access to Parking. Seller agrees to provide the
U.S. Acquisition Subsidiary with access to 150 parking spaces
located on the "finger strip property" adjacent to the real
property leased by Seller at 0000 Xxxx 00xx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, pursuant to the Agreement of Lease
dated December 13, 1962, as amended, between Xxxxxxx X.
Xxxxxxxx & Company, Inc. and Control Data Corporation (the
"Lease"). Such access shall be provided without charge
through March 31, 1999 and upon reasonable fair market terms
from April 1, 1999 through the expiration of the current
renewal term of the Lease. Seller and the U.S. Acquisition
Subsidiary shall negotiate in good faith and execute an
easement agreement or other appropriate instrument evidencing
the agreement of the parties contained in this Section 3. In
the event Seller determines to sell or assign the "finger
strip property," Seller shall enter into appropriate
arrangements to cause the recognition of the rights of the
U.S. Acquisition Subsidiary hereunder by the purchaser or
assignee of such property.
4. Certain Litigation Matters. Seller represents and
warrants to Buyer that it has entered into a Stipulation for
Compromise Settlement dated as of December 3, 1997 (the
"Settlement") releasing Seller from liability with respect to
all matters subject to the Department of Justice
investigation disclosed in the Disclosure Schedule and that
it has made all payments and taken all other actions
necessary to satisfy its obligations under the terms of the
Settlement. Seller shall assist Buyer, at Buyer's request
from time to time, in enforcing the provision of the
Settlement and shall indemnify, defend and hold harmless each
of the Buyer Indemnified Parties from and against any and all
Damages incurred by any of the Buyer Indemnified Parties as a
result of or in connection with the matters subject to the
Settlement.
5. Modifications to Ancillary Agreements. The parties
acknowledge that the Transition Services Agreement, Personnel
Agreement and Tax Matters Agreement executed and delivered by
the parties as of the date hereof contain certain
modifications agreed upon by the parties since the date of
the Purchase Agreement and that such executed agreements
accordingly differ from the forms of agreement attached as
exhibits to the Purchase Agreement. The parties agree that
the agreements executed and delivered by the parties as of
the date of this Agreement shall be deemed to supersede and
replace in their entirety the forms of agreement attached as
exhibits to the Purchase Agreement.
6. Terms of Purchase Agreement to Control. The parties
agree that notwithstanding the terms of the instruments of
assignment executed in connection with the assignment and
transfer of certain of the Assets, the rights and obligations
of the parties with respect thereto shall in all cases be
determined in accordance with the provisions of the Purchase
Agreement and, in the event of any inconsistency between the
provisions such instruments and the Purchase Agreement, the
provisions of the Purchase Agreement shall govern and
control.
7. Transfer of Pension Assets. Under Section 4.1(b) of
the Personnel Agreement, the parties have agreed to transfer
certain assets from the Master Trust to the Successor Trust
(as those terms are defined in the Personnel Agreement). In
connection with the transfer of assets, the parties further
agree to the following:
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(a) Effective December 31, 1997, Seller will cause the
Master Trust to transfer to the Successor Trust that portion
of the assets of the Master Trust allocable to the CD Int
Retirement Plan (as the term is defined in the Personnel
Agreement) in the manner set forth in paragraphs 7(b) - (e).
The CD Int Retirement Plan's allocable share of the assets
of the Master Trust as of December 31, 1997 will be
determined by the trustee of the Master Trust in accordance
with the terms of the applicable Master Retirement Trust
Agreement and the settlement liability allocation described
in paragraph 7(f).
(b) The CD Int Retirement Plan's allocable share of the
following securities and cash maintained in the Master Trust
as of December 31, 1997 shall be transferred in-kind to the
Successor Trust:
(1) The securities and cash as of that date in
investment accounts within the Master Trust managed by
the following investment managers: Xxxxxxxx Associates
Capital Corp.; Xxxxxxxxx & Xxxxxx; J.&W. Xxxxxxxx & Co.
Incorporated; GlobeFlex Capital, L.P.; Xxxxxx, Xxxxxx &
Company, L.P.; and Investment Advisers, Inc. Securities
in each of these investment accounts will be allocated
on a holding by holding basis, with the amount of each
security to be received by the Successor Trust to be
rounded down to the nearest round lot (100 shares in the
case of equities, $1,000 principal amount in the case of
debt securities). The Master Trust will concurrently
transfer to the Successor Trust cash in an amount equal
to the closing market value on December 31, 1997 of the
odd-lot securities that would otherwise have been part
of the CD Int Retirement Plan's allocable share of the
securities in these investment accounts.
(2) The participating units, cash and other
securities as of that date in the investment account
within the Master Trust managed by ERE Yarmouth Prime
Property Fund.
(3) The securities and cash as of that date in the
Imprest Account within the Master Trust.
(c) The CD Int Retirement Plan's allocable share of the
participating units and cash as of December 31, 1997 in the
investment account within the Master Trust managed by Bankers
Trust Company shall be redeemed by Bankers Trust Company on
December 31, 1997 and the proceeds of such redemption
transferred from the Master Trust to the Successor Trust at
the time of the transfer contemplated by paragraph 7(b). The
CD Int Retirement Plan's allocable share of the participating
units and cash as of December 31, 1997 in the investment
account within the Master Trust managed by Bank of Ireland
Asset Management Limited ("Bank of Ireland") shall be
redeemed by Bank of Ireland as of January 2, 1998 and the
proceeds of such redemption transferred directly from Bank of
Ireland to the Successor Trust. Seller shall cause any
necessary redemption requests to be provided to Bankers Trust
Company and Bank of Ireland, and Buyer shall join in such
requests or provide such additional notices as Bankers Trust
Company or Bank of Ireland may reasonably require.
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(d) The value, as of December 31, 1997, of the CD Int
Retirement Plan's allocable share of the limited partnership
interests and other securities maintained in the Master Trust
in the real estate and venture capital limited partnerships
and funds listed in Exhibit B attached hereto shall be
transferred in cash from the Master Trust to the Successor
Trust. The value of such limited partnership interests and
securities as of December 31, 1997 shall be as determined in
the ordinary course by the general partners of such
partnerships and the managers of such funds and expressed in
statements of account dated as of December 31, 1997 issued by
the trustee of the Master Trust. At the same time as the
transfer contemplated by paragraph 7(b), an estimate of the
amount to be transferred under this paragraph 7(d) shall be
transferred to the Successor Trust utilizing the value of
such limited partnership interests and securities as
expressed in statements of account issued by the trustee of
the Master Trust as of November 30, 1997. As soon as
administratively practicable after the December 31, 1997
valuations from the general partners and managers are
available, the Master Trust will transfer to the Successor
Trust the amount by which the December 31, 1997 value of the
CD Int Retirement Plan's allocable share of such limited
partnership interests and other securities exceeds the amount
of the estimated payment, or the Successor Trust will
transfer to the Master Trust the amount by which the
estimated payment exceeds the December 31, 1997 value of the
CD Int Retirement Plan's allocable share of such limited
partnership interests and other securities, in either case
together with interest at the Applicable Rate (as defined in
paragraph 7(g)) from January 1, 1998 through the day prior to
such transfer.
(e) The parties acknowledge and agree that the CD Int
Retirement Plan checking account maintained with the trustee
of the Master Trust, and all cash therein, shall, at the time
the transfer contemplated by paragraph 7(b) occurs, be
transferred to the trustee of the Successor Trust, which
shall initially be First Trust National Association.
(f) Section 4.5(i) of the Asset Purchase Agreement
requires Seller not to permit the CD Int Retirement Plan to
pay consideration in excess of $3,000,000 in connection with
the settlement of the matter captioned Xxxxxxx Xxxxxx et al.
v. Ceridian Corporation et al. between November 3, 1997 and
the Closing Date. Because the amount of the settlement
allocable to the CD Int Retirement Plan will not be known by
the Closing Date, the parties agree that as of the Closing
Date, an allocation of $3,000,000 of settlement liability to
the CD Int Retirement Plan is reasonable and appropriate.
The parties further agree that:
(1) If the final allocation of liability to the CD
Int Retirement Plan is less than $3,000,000, then as
soon as administratively practicable after Seller
receives the final allocation schedule from plaintiffs'
counsel, Seller will cause the Master Trust to transfer
to the Successor Trust cash in the amount by which
$3,000,000 exceeds the liabilities allocated to the CD
Int Retirement Plan together with interest thereon at
the Applicable Rate for the period from January 1, 1998
through the day prior to such transfer.
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(2) If the final allocation of liability to the CD
Int Retirement Plan is more than $3,000,000, then as
soon as administratively practicable after Seller
receives the final allocation schedule from plaintiffs'
counsel, Seller will forward to Buyer a copy of the
schedule. As soon as administratively practicable after
receiving the schedule, Buyer will cause the Successor
Trust to transfer to the Master Trust cash in the amount
by which the liabilities allocated to the CD Int
Retirement Plan exceeds $3,000,000, together with
interest thereon at the Applicable Rate for the period
from January 1, 1998 through the day prior to such
transfer. Within ten business days after receipt of
that transfer by the Master Trust, Seller will make a
cash payment to Buyer in the same amount and Buyer will
make a contribution to the Successor Trust with respect
to the CD Int Retirement Plan in the same amount within
ten business days after the end of the calendar quarter
during which Buyer received the payment; provided that
if Buyer determines that the contribution would not be
fully deductible for federal income tax purposes for the
taxable year of the Buyer in which the contribution
would otherwise be made, Buyer may defer the portion of
the contribution that would not be deductible until the
first taxable year of Buyer for which such portion would
be deductible for federal income tax purposes and will
make such contribution on or as soon as administratively
practicable after the first day of such taxable year.
(g) For purposes of this Section 7, Applicable Rate
means an annual rate of interest equal to the closing yield
reported in the Wall Street Journal for 3 month Treasury
bills as of December 31, 1997. This rate shall be applied
for the actual number of days principal amounts are
outstanding.
8. Allocation of Purchase Price. The parties agree
that $287 million of the Cash Portion of the Purchase Price
shall be allocated to the capital stock of CD Canada. In the
event the amount of the Cash Portion of the Purchase Price is
adjusted pursuant to Section 1.4 of the Agreement, the
parties agree that the foregoing amount allocated to the
capital stock of CD Canada will be increased or decreased, as
appropriate, to reflect any change in the consolidated net
assets of CD Canada between September 30, 1997 and the
Closing Date.
9. Assignment of Bank Accounts.
(a) The parties agree that as of the Closing
Seller shall assign and transfer to the U.S. Acquisition
Subsidiary the bank accounts relating to the CD Int Business
listed on Exhibit B to this Agreement (collectively, the
"Transferred Bank Accounts"). Seller agrees to take all
other necessary or desirable actions reasonably requested by
Buyer to evidence and confirm the foregoing assignment and
transfer.
(b) Buyer shall cause the payroll accounts
included in the Transferred Bank Accounts to be funded in an
amount sufficient to satisfy all payroll obligations of the
United States operations of the CD Int Business for the pay
period ending December 31, 1997. Buyer agrees that Seller
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may remove all or a portion of the other cash held in the
Transferred Bank Accounts prior to the Closing; provided
however, it is understood that notwithstanding any contrary
provision in the Asset Purchase Agreement any cash balances
in the Transferred Bank Accounts shall be included as an
asset on the Final Audited Closing Statement of Net Assets.
Seller acknowledges that it shall not be entitled to remove
any cash held an any bank account maintained by CD Canada,
the CD U.K. Subsidiaries and CD Plus.
(c) Buyer and the U.S. Acquisition Subsidiary
acknowledge that certain checks drawn on the Transferred Bank
Accounts have been issued but not presented for payment as of
the Closing Date and that the liability to fund the
Transferred Bank Accounts to satisfy such outstanding checks
is an Assumed Liability under Section 1.2(b) of the Purchase
Agreement.
(d) Buyer and Seller agree that for purposes of
calculating the Closing Date Net Assets pursuant to Section
1.4 of the Purchase Agreement, a liability shall be recorded
on the Final Audited Closing Statement of Net Assets in an
amount equal to the aggregate amount of outstanding checks
issued but not presented for payment as of the Closing
constituting Assumed Liabilities in accordance with Section
1.2(b) of the Purchase Agreement. No liability shall be
recorded on the Final Audited Closing Statement of Net Assets
with respect to outstanding payroll checks to the extent such
checks have been funded by Seller pursuant to Section 9(b)
above.
10. Effect on Purchase Agreement. Except as expressly
provided in this Agreement, the Purchase Agreement shall
continue and be in full force and effect as originally
executed and delivered by the parties.
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IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
CERIDIAN CORPORATION
By
Its
GENERAL DYNAMICS CORPORATION
By
Its
GENERAL DYNAMICS INFORMATION
SYSTEMS, INC.
By
Its
CDI ACQUISITION COMPANY
By
Its
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