EXHIBIT 2.01
AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 20, 1998
BETWEEN
FEDERATED INVESTORS,
A DELAWARE BUSINESS TRUST
AND
FEDERATED INVESTORS, INC.,
A PENNSYLVANIA CORPORATION.
AGREEMENT AND PLAN OF MERGER dated as of February 20, 1998 (this
"Agreement"), among FEDERATED INVESTORS, a Delaware business trust (the
"Trust"), and FEDERATED INVESTORS, INC., a Pennsylvania corporation (the
"Company").
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Trust and the Company desire to enter into a merger transaction
pursuant to which the Trust will be merged with and into the Company, with the
Company continuing as the surviving corporation (the "Merger"), whereby each
issued and outstanding Class A Common Share, $1.00 stated value per share, of
the Trust ("Trust Class A Common Shares") will be converted into one share of
Class A Common Stock, no par value per share, of the Company ("Class A Common
Stock"), and each issued and outstanding Class B Common Share, $0.01 stated
value per share, of the Trust ("Trust Class B Common Shares")(other than
shares held in the treasury of the Trust immediately prior to the Effective
Time (as defined herein)) will be converted into one share of Class B Common
Stock, no par value per share, of the Company ("Class B Common Stock", and,
together with the Class A Common Stock, the "Company Common Stock"); and
WHEREAS, the Merger is intended to be a tax-free transaction pursuant to
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
such that no gain or loss will be recognized by the Trust and no gain or loss
will be recognized by holders of Trust Class A Common Shares or Trust Class B
Common Shares on the exchange of such shares for Class A Common Stock or Class
B Common Stock pursuant to this Agreement; and
WHEREAS, the Trust and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger, including the consummation of an
initial public offering by the Company on terms satisfactory to the Company
and the Trust (the "Offering");
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER
Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the Pennsylvania Business Corporation Law of 1988, as
amended (the "PBCL"), the Delaware Business Trust Act, as amended (the "DBTA")
and the Restated Declaration of Trust of the Trust dated July 28, 1989, as
amended (the "Declaration"), the Trust shall be merged with and into the
Company at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate existence of the Trust shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations
of the Trust in accordance with applicable law.
SECTION 1.02. CLOSING
The closing of the Merger (the "Closing") will take place at 10:00 a.m. on a
date to be specified by the parties (the "Closing Date") at the offices of the
Trust, Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, unless
another time, date or place is agreed to by the parties hereto.
SECTION 1.03. EFFECTIVE TIME
Subject to the provisions of this Agreement, as soon as practicable on or
after the Closing Date, the parties shall file a certificate of merger (the
"Certificate of Merger") executed in accordance with the relevant provisions
of the DBTA and the Declaration and articles of merger (the "Articles of
Merger") executed in accordance with
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the relevant provisions of the PBCL, and shall make all other filings or
recordings required under the DBTA and the PBCL. The Merger shall become
effective at such time as the Trust and the Company shall agree and as is
specified in the Certificate of Merger and the Articles of Merger (the time
the Merger becomes effective being hereinafter referred to as the "Effective
Time").
SECTION 1.04. EFFECTS OF THE MERGER
The Merger shall have the effects specified in Section 1929 of the PBCL and
Section 3815(g) of the DBTA.
SECTION 1.05. ARTICLES OF INCORPORATION AND BY-LAWS
(a) At the Effective Time and without further action on the part of the
Company, the Restated Articles of Incorporation of the Company attached hereto
as Exhibit A shall be the articles of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) At the Effective Time and without further action on the part of the
Company, the Restated By-laws of the Company attached hereto as Exhibit B
shall be the by-laws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
SECTION 1.06. DIRECTORS
The directors of the Company immediately prior to the Effective Time shall
be the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
SECTION 1.07. OFFICERS
The officers of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE PARTIES
SECTION 2.01. EFFECT ON CAPITAL STOCK
As of the Effective Time, by virtue of the Merger and without any action on
the part of the Trust or the holder of any Trust Class A Common Shares or
Trust Class B Common Shares:
(a) Cancellation of Treasury Shares. Each Trust Class A Common Share and
Trust Class B Common Share that is owned by the Trust or the Company shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of Trust Class A Common Shares. Each issued and outstanding
Trust Class A Common Share (other than shares to be canceled in accordance
with Section 2.01(a)) shall be converted into one share of Class A Common
Stock (the "Class A Merger Consideration").
(c) Conversion of Trust Class B Common Shares. Except as otherwise provided
by Section 2.01(d), each issued and outstanding Trust Class B Common Share
(other than shares to be canceled in accordance with Section 2.01(a)) shall be
converted into one share of Class B Common Stock. The consideration issuable
pursuant to this paragraph is referred to herein as the "Class B Merger
Consideration", and together with the Class A Merger Consideration, as the
"Merger Consideration".
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(d) Dissenting Shareholders. To the extent that Section 8.7 of the
Declaration is declared by a court of competent jurisdiction to be applicable
to the Merger, any issued and outstanding Trust Class B Common Shares held by
a person, other than any member of the Management Circle (as defined in the
Shareholder Rights Agreement dated August 1, 1989, between the Company, The
Standard Fire Insurance Company and the other shareholders bound thereby, as
amended (the "Shareholder Rights Agreement")) or any employee of the Trust or
any subsidiary of the Trust ("Employee Shareholders"), who shall not have
voted to adopt this Agreement or consented thereto in writing and who shall
have properly demanded appraisal (a "Dissenting Shareholder") for such shares
in accordance with Section 8.7 of the Declaration ("Dissenting Shares") (which
Section provides that appraisal rights shall only apply if holders other than
members of the Management Circle and Employee Shareholders holding at least
2/3 of the total outstanding Trust Class B Common Shares held by such holders
have requested such rights) shall not be converted as described in Section
2.01(b) and (c), unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If, after the Effective Time, such Dissenting
Shareholder fails to perfect or withdraws or loses his right to appraisal,
such Dissenting Shareholder's Trust Class B Common Shares shall no longer be
considered Dissenting Shares for the purposes of this Agreement and shall
thereupon be deemed to have been converted into and to have become
exchangeable for, at the Effective Time, the Class B Merger Consideration. In
determining the fair value of the Dissenting Shares and in otherwise
implementing Section 8.7 of the Declaration, Section 262 of the Delaware
General Corporation Law ("DGCL") shall apply.
(e) Cancellation of Trust Class A Common Shares and Trust Class B Common
Shares. As of the Effective Time, all Trust Class A Common Shares and Trust
Class B Common Shares shall no longer be outstanding and shall automatically
be canceled and shall cease to exist, and each holder of a certificate that
immediately prior to the Effective Time represented any such Trust Class A
Common Shares or Trust Class B Common Shares (a "Certificate") shall cease to
have any rights with respect thereto, except the right to receive the
applicable Merger Consideration, or, in the case of Dissenting Shareholders,
if any, the rights, if any, accorded under Section 8.7 of the Declaration.
(f) Cancellation of Company Capital Stock held by Trust. As of the Effective
Time, all shares of the capital stock of the Company that are owned by the
Trust shall automatically be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
SECTION 2.02. EXCHANGE OF CERTIFICATES
(a) Deposit with the Exchange Agent. As of the Effective Time, the Company
shall deposit with or other independent agent mutually acceptable
to the Company and the Trust (the "Exchange Agent") for the benefit of the
holders of Trust Class A Common Shares and Trust Class B Common Shares, for
exchange through the Exchange Agent, the certificates evidencing the Merger
Consideration (the "Exchange Fund") payable pursuant to Section 2.01 in
exchange for outstanding Trust Class A Common Shares and Trust Class B Common
Shares.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
Certificate or Certificates, (i) a letter of transmittal and (ii) instructions
for use in effecting the surrender of such Certificates in exchange for the
applicable Merger Consideration. Upon surrender of such a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by the Company, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive a
certificate or certificates evidencing the Merger Consideration which such
holder has the right to receive pursuant to this Article II, and the
Certificate so surrendered shall forthwith be canceled. Until so surrendered,
each certificate formerly evidencing shares of Trust Common Shares which have
been so converted will be deemed for all corporate purposes of the Company to
evidence ownership of the number of shares of Class A Common Stock or Class B
Common Stock of the Company, as the case may be, for which the Trust Class A
or Class B Common Shares formerly represented thereby were exchanged;
provided, however, that until such certificate is so surrendered, no dividend
payable to holders of record of Class A Common Stock or Class
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B Common Stock of the Company as of any date subsequent to the Effective Time
shall be paid to the holder of such certificate in respect of the shares of
Class A Common Stock or Class B Common Stock of the Company evidenced thereby
and such holder shall not be entitled to vote such shares of Class A Common
Stock or Class B Common Stock of the Company. Upon surrender of a certificate
formerly evidencing Trust Common Shares which have been so converted, there
shall be paid to the record holder of the certificates of Class A Common Stock
or Class B Common Stock issued in exchange therefor (i) at the time of such
surrender, the amount of dividends and any other distributions theretofore
paid with respect to such shares of Class A Common Stock or Class B Common
Stock of the Company, as of any date subsequent to the Effective Time to the
extent the same has not yet been paid to a public official pursuant to
abandoned property, escheat or similar laws and (ii) at the appropriate
payment date, the amount of dividends and any other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such shares of Class A Common
Stock or Class B Common Stock of the Company. No interest shall be payable
with respect to the payment of such dividends.
(c) No Further Ownership Rights in Trust Class A Common Shares and Trust
Class B Common Shares. The Merger Consideration issued upon the surrender of
Certificates in accordance with the terms of this Article II shall be deemed
to have been paid in full satisfaction of all rights pertaining to the Trust
Class A Common Shares and Trust Class B Common Shares theretofore represented
by such Certificates, and there shall be no further registration of transfers
on the stock transfer books of the Surviving Corporation of the Trust Class A
Common Shares and Trust Class B Common Shares that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided in this
Article II, except as otherwise provided by law.
(d) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate 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 Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate
the Merger Consideration deliverable in respect thereof, pursuant to this
Agreement.
ARTICLE III
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Trust as follows:
(a) Organization, Standing and Corporate Power. The Company is a corporation
duly formed and validly subsisting under the laws of the Commonwealth of
Pennsylvania and has the requisite corporate power and authority to carry on
its business as now being conducted. The business of the Company is carried
out through subsidiaries that are duly qualified or licensed to do business
and are in good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of their business or the
ownership or leasing of their properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the
aggregate would not have a material adverse effect on the Company or any
subsidiary.
(b) Capital Structure. Immediately prior to the Effective Time (or prior to
the adoption of the Restated Articles of Incorporation), there were 5,095,512
shares of common stock, par value $.05 per share, of the Company issued and
outstanding, all of which were owned by the Trust. As of the Effective Time,
the authorized capital stock of the Company shall consist of 20,000 shares of
Class A Common Stock, no par value, 900,000,000 shares of Class B Common
Stock, no par value and 100,000,000 shares of preferred stock, no par value
per share ("Preferred Stock"). As of the Effective Time (after giving effect
to the 1998 Stock Dividend
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but without giving effect to the Offering described in Section 4.03), the
consummation which is a condition to the Merger as set forth in Section
5.01(d), there will be 4,000 shares of Class A Common Stock issued and
outstanding, 55,618,000 shares of Class B Common Stock issued and outstanding
and 9,000,000 shares of Class B Common Stock reserved for issuance under the
Federated Investors Stock Incentive Plan (the "Stock Incentive Plan"). Except
as set forth above, immediately prior to the Effective Time, no shares of
capital stock or other voting securities of the Company were issued, reserved
for issuance or outstanding. All outstanding shares of capital stock of the
Company are, and all shares which may be issued will be, when issued, duly
authorized, validly issued, fully paid and nonassessable.
(c) Authority. The Company has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Company. The execution and delivery of this Agreement by the Trust
shall constitute the approval of this Agreement by the Trust in its capacity
as the sole shareholder of the Company. This Agreement has been duly executed
and delivered by the Company and constitutes the valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
(d) Noncontravention. Subject to (i) compliance with the terms of the Senior
Secured Credit Agreement, dated January 31, 1996, as amended, among the Trust,
PNC Bank, National Association, and the other banks named therein (the "Senior
Credit Agreement"), (ii) compliance with the terms of the Note Purchase
Agreement, dated as of June 15, 1996, among the Trust and the Purchasers
identified therein (the "Note Purchase Agreement"), and (iii) compliance with
the terms of the Pledge Agreement, dated as of June 15, 1996, among the Trust,
the Company, the Pledgors (as defined therein), the Collateral Agent (as
defined therein) and the Noteholders (as defined therein) (the "Pledge
Agreement"), the execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or
result in the creation of any lien upon any of the properties or assets of the
Company under, (i) the Articles of Incorporation or By-laws of the Company, as
amended to date, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to the Company or its properties or assets or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or its properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
losses or liens that individually or in the aggregate would not (x) have a
material adverse effect on the Company, (y) impair the ability of the Company
to perform its obligations under this Agreement in any material respect or (z)
prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign (a "Governmental
Entity"), is required by or with respect to the Company or any of its
subsidiaries in connection with the execution and delivery of this Agreement
by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, except for (1) the effectiveness of the
Registration Statement on Form S-4 with respect to the Merger (the "S-4
Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), including a Proxy Statement (hereinafter defined) meeting the
requirements of the Securities Exchange Act of 1934, as amended; (2) the
effectiveness of the Registration Statement on Form S-1 with respect to the
Offering filed with the Commission pursuant to the Act; (3) the filing of the
Certificate of Merger with the Delaware Secretary of State and the Articles of
Merger with the Pennsylvania Secretary of State and; (4) such consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure to make or obtain which would not reasonably be expected to have a
material adverse effect on the Company or impair the ability of the Company to
perform its obligations under this Agreement in any material respect.
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SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF THE TRUST.
The Trust represents and warrants to the Company as follows:
(a) Organization, Standing and Power. The Trust is a business trust duly
organized, validly existing and in good standing under the laws of Delaware
and has the requisite power and authority to carry on its business as now
being conducted. The Trust is duly qualified or licensed to do business and is
in good standing in the Commonwealth of Pennsylvania, and is not required to
be so qualified or licensed in any other jurisdiction.
(b) Capital Structure. The authorized capital stock of the Trust consists of
150,000,000 shares of beneficial interest, consisting of four classes as
follows: (i) 125,000 shares of Series B Cumulative Preferred Shares, no par
value per share, none of which are issued and outstanding, (ii) 75,000 shares
of Series C Preferred Shares, no par value per share, none of which are issued
and outstanding as of February 20, 1998 (4,000 shares after giving effect to
the 1998 Stock Dividend hereinafter defined), (iii) 99,000 Class A Common
Shares, no par value per share, 2,000 of which are issued and outstanding, and
(iv) 149,700,000 Class B Common Shares, no par value per share, 27,809,000 of
which are issued and outstanding as of February 20, 1998 (55,618,000 shares
after giving effect to the 1998 Stock Dividend). Except for the shares of
restricted stock, stock appreciation rights and stock options issued and/or
granted under the Trust's Restricted Stock Plan, Stock Appreciation Rights
Plan and Stock Incentive Plan (the "Prior Stock Plan") which, as of February
20, 1998, aggregated 1,411,000 restricted shares of Class B Common Shares
(2,822,000 shares after giving effect to the 1998 Stock Dividend) and
1,332,400 shares of Class B Common Shares (2,664,800 shares after giving
effect to the 1998 Stock Dividend), and except as set forth in the first
sentence of this paragraph, there are no outstanding stock appreciation rights
or rights to receive shares of the Trust on a deferred basis and no shares of
capital stock or beneficial interests of the Trust are issued, reserved for
issuance or outstanding, except for the one for one stock dividend declared on
February 20, 1998 to be paid on April 1, 1998 to shareholders of record on
March 17, 1998 (the "1998 Stock Dividend"). All outstanding shares of
beneficial interest of the Trust are duly authorized, validly issued, fully
paid and nonassessable, and subject to the Shareholder Rights Agreement.
(c) Authority. The Trust has all requisite power and authority under the
DBTA and the Declaration to enter into this Agreement and, subject to the
Trust Shareholder Approval (as defined herein), to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement
by the Trust and the consummation by the Trust of the transactions
contemplated by this Agreement have been duly authorized by all necessary
action required under the DBTA and the Declaration on the part of the Trust,
subject to the Trust Shareholder Approval. This Agreement has been duly
executed and delivered by the Trust and constitutes a valid and binding
obligation of the Trust, enforceable against the Trust in accordance with its
terms. The consummation of the Merger contemplated by this Agreement requires
the affirmative vote of the holders of a majority of the outstanding Trust
Class A Common Shares and Trust Class B Common Shares, each voting separately
as a class ("Trust Shareholder Approval").
(d) Ownership of the Company. The Trust owns all of the outstanding capital
stock of the Company, free and clear of all liens and encumbrances except for
encumbrances created under the Pledge Agreement, and has duly approved this
Agreement in its capacity as the sole shareholder of the Company.
(e) Noncontravention. Subject to (i) the Trust Shareholder Approval, (ii)
compliance with the terms of Sections 8.1 and 8.2 of the Senior Credit
Agreement and (iii) compliance with Section 6 of the Pledge Agreement, the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement by the Trust will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the
creation of any lien upon any of the properties or assets of the Trust under,
(i) the Restated Declaration of Trust of the Trust, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Trust
or its properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any
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judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Trust or its properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
losses or liens that individually or in the aggregate would not (x) have a
material adverse effect on the Trust, (y) impair the ability of the Trust to
perform its obligations under this Agreement in any material respect or (z)
prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required by or with respect to the Trust in connection with the execution and
delivery of this Agreement by the Trust or the consummation by the Trust of
the transactions contemplated by this Agreement, except for (1) the filing
with the Commission of a definitive proxy statement relating to the Special
Meeting (as defined herein) (such proxy statement, as amended or supplemented
from time to time, the "Proxy Statement"), (2) the filing of the Certificate
of Merger with the Delaware Secretary of State and the Articles of Merger with
the Pennsylvania Secretary of State; and (3) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure to make or
obtain which would not reasonably be expected to have a material adverse
effect on the Trust or impair the ability of the Trust to perform its
obligations under this Agreement in any material respect.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.01. PREPARATION OF THE PROXY STATEMENT AND S-4 REGISTRATION
STATEMENT; SPECIAL MEETING.
(a) As soon as practicable following the date of this Agreement, the Company
and the Trust shall prepare and file with the Commission the Proxy Statement
and the S-4 Registration Statement. The Trust and the Company shall use all
reasonable efforts to cause the S-4 Registration Statement to be declared
effective by the Commission as soon as practicable following the filing
thereof with the Commission. The Trust will use all reasonable efforts to
cause the Proxy Statement to be mailed to holders of the Trust's beneficial
interests as promptly as practicable after the effectiveness of the S-4
Registration Statement.
(b) The Trust will, as soon as practicable following the effectiveness of
the S-4 Registration Statement, duly call, give notice of, convene and hold a
meeting of the holders of its beneficial interests (the "Special Meeting") for
the purpose of obtaining the approval of the holders of a majority of the
Trust Class A Common Shares and Trust Class B Common Shares, each voting
separately as a class, of this Agreement and the transactions contemplated
hereby (the "Trust Shareholder Approval"). The Trust will, through its Board
of Trustees, recommend to the holders of its beneficial interests the adoption
of this Agreement and the approval of the transactions contemplated hereby.
SECTION 4.02. STOCK OPTION AND BENEFIT PLANS.
At the Effective Time, the Company shall assume the rights and obligations
of the Trust under the Trust's Prior Stock Plan. The Company shall treat as
having been issued under its Stock Incentive Plan all shares of restricted
stock, stock appreciation rights and stock options issued under the Prior
Stock Plan. At the Effective Time, each share of restricted stock, stock
appreciation right and stock option issued or granted under the Prior Stock
Plan shall be converted automatically into a share of restricted stock, stock
appreciation right or stock option, as the case may be, of or with respect to
Class B Common Stock. The Board of Directors of the Company and the Board of
Trustees of the Trust shall take all actions necessary to carry into effect
the intent of this Section 4.02. The Company shall, as soon as practicable
following the Effective Time, register on Form S-8 or such other form as may
be prescribed by the Commission the securities to be issued by the Company in
connection with the assumption of the Trust's obligations under the Prior
Stock Plan.
SECTION 4.03. PREPARATION OF S-1 REGISTRATION STATEMENT.
As soon as practicable following the date of this Agreement, the Company,
with the cooperation of the Trust, shall prepare and file with the Commission
a Registration Statement on Form S-1 with respect to the
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Offering setting forth the terms of such Offering as the Company, in its sole
discretion, may determine, including timing and pricing of the Offering, the
number of the shares to be offered by the Company and any selling
shareholders, the selection of underwriters and all other matters relating to
the Offering. The Offering will be subject to prevailing market conditions and
other factors as may be taken into account by the Board of Directors of the
Company. Neither the Trust nor the Company shall be obligated to cause the S-1
Registration Statement to be declared effective by the Commission, if in
either party's judgment the Offering should not proceed.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
The respective obligation of each party to effect the Merger is subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Trust Shareholder Approval. The Trust Shareholder Approval shall have
been obtained.
(b) No Appraisal Rights. In connection with the Merger, there shall not be
written demands or objections made and not withdrawn or otherwise lost by
Dissenting Shareholders who in the aggregate hold at least 2/3 of the total
outstanding Trust Class B Common Shares held by all holders who are entitled
to seek appraisal rights under Section 8.7 of the Declaration.
(c) No Injunctions or Restraints. No judgment, decree, statute, law,
ordinance, rule, regulation, temporary restraining order, preliminary or
permanent injunction or other order enacted, entered, promulgated, enforced or
issued by any court of competent jurisdiction or other Governmental Entity or
other legal restraint or prohibition preventing the consummation of the Merger
shall be in effect.
(d) Effective Registration Statement. The S-4 Registration Statement filed
by the Company with respect to the Merger shall have been declared effective,
and no stop order or proceeding seeking a stop order is in effect or has been
instituted.
(e) Consummation of Offering. The S-1 Registration Statement filed by the
Company with respect to the Offering shall have been declared effective, and
no stop order or proceeding seeking stop order is in effect or has been
instituted, and the Offering shall have been made on terms and conditions
(including size and price) satisfactory to the Company and the Trust and shall
be consummated on the Closing Date concurrently with the Merger.
SECTION 5.02. CONDITIONS TO OBLIGATION OF THE TRUST
The obligation of the Trust to effect the Merger is further subject to
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and warranties of
the Company set forth in this Agreement shall be true and correct as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case as of such date).
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) Consents and Notices. The Company shall have received any material third
party or governmental consent and shall have provided any material notice or
other document required to be provided by it in connection with the
transactions contemplated by this Agreement, including, without limitation,
the consent of
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PNC Bank, National Association pursuant to the Senior Credit Agreement and the
Note Purchase Agreement, and the provision of the notice required by the
Pledge Agreement.
(d) Effective Registration Statement. The S-4 Registration Statement filed
by the Company with respect to the Merger shall have been declared effective,
and no stop order or proceeding seeking a stop order is in effect or has been
instituted.
SECTION 5.03. CONDITIONS TO OBLIGATION OF THE COMPANY
The obligation of the Company to effect the Merger is further subject to
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and warranties of
the Trust set forth in this Agreement shall be true and correct as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date, except to the extent such representations expressly relate to an
earlier date (in which case as of such date).
(b) Performance of Obligations of the Trust. The Trust shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date.
(c) Consents. The Trust shall have received any material third party or
governmental consent and shall have provided any material notice or other
document required to be provided by it in connection with the transactions
contemplated by this Agreement, including, without limitation, obtaining the
consent and providing the notice and proxies required by the Senior Credit
Agreement and providing the notices required by the Pledge Agreement.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.01. TERMINATION
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after the Trust Shareholder Approval:
(a) by mutual consent of the Trust and the Company;
(b) by either the Trust or the Company:
(i) if a court of competent jurisdiction or other governmental entity
shall have issued a nonappealable final order, decree or ruling or taken
any other action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger;
(ii) if at the Special Meeting (including any adjournment or postponement
thereof), the requisite vote of the holders of the Trust Class A Common
Shares and Trust Class B Common Shares in favor of this Agreement and the
Merger shall not have been obtained; or
(iii) if the registration statement relating to the Offering shall not
have become effective under the Securities Act of 1933, as amended, or the
Offering shall have been abandoned or not otherwise consummated.
SECTION 6.02. EFFECT OF TERMINATION
In the event of termination of this Agreement by either the Company or the
Trust as provided in Section 6.01, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of the
Trust, the Company or their respective officers, directors, trustees,
shareholders or affiliates.
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SECTION 6.03. AMENDMENT
This Agreement may be amended at any time by action taken or authorized by
the Board of Trustees of the Trust and the Board of Directors of the Company;
provided, however, that after the Trust Shareholder Approval is obtained, no
amendment shall be made which by law requires further approval by the holders
of Trust Class A Common Shares or Trust Class B Common Shares without such
further approval.
SECTION 6.04. EXTENSION; WAIVER
The Company and the Trust, by action taken or authorized by the Board of
Directors or the Board of Trustees, respectively, may extend the time for
performance of the obligations or other acts of the other party to this
Agreement, may waive inaccuracies in the representations or warranties
contained in this Agreement, and may waive compliance with any agreements or
conditions contained in this Agreement. The failure of either party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 7.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.
SECTION 7.02. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
SECTION 7.03. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES
This Agreement constitutes the entire agreement, and supersede all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter of this Agreement and is not intended to confer
upon any person other than the parties any rights or remedies.
SECTION 7.04. GOVERNING LAW
Except as otherwise specifically referred to herein, this Agreement shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof; except that the Merger
contemplated hereby shall be governed by the laws of the State of Delaware and
the Commonwealth of Pennsylvania.
SECTION 7.05. ASSIGNMENT
Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by either party without the prior written consent of the other
party. Any assignment in violation of the preceding sentence 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.
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SECTION 7.06. FEES AND EXPENSES
All fees, costs and expenses incurred by the Trust and the Company in
connection with this Agreement and the transactions contemplated hereby shall
be paid (i) by the Trust if the Merger does not occur and (ii) by the Company
if the Merger occurs.
IN WITNESS WHEREOF, the Trust and the Company have caused this Agreement to
be signed by their respective officers hereunto duly authorized, all as of the
date first written above.
FEDERATED INVESTORS
By:
-------------------------------
Name:
Title:
FEDERATED INVESTORS, INC.
By:
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Name:
Title:
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