Exhibit 2.1
EXECUTION COPY
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
Dated as of November 14, 2005
Among
XXXXXXX & XXXXXXX,
XXXXXX MERGER SUB, INC.
And
GUIDANT CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I
The Merger
SECTION 1.01. The Merger...................................................1
SECTION 1.02. Closing......................................................2
SECTION 1.03. Effective Time...............................................2
SECTION 1.04. Effects of the Merger........................................2
SECTION 1.05. Articles of Incorporation and By-laws........................2
SECTION 1.06. Directors....................................................2
SECTION 1.07. Officers.....................................................2
ARTICLE II
Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates
SECTION 2.01. Effect on Capital Stock......................................3
SECTION 2.02. Exchange of Certificates.....................................4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company................7
SECTION 3.02. Representations and Warranties of Parent and Sub............27
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
SECTION 4.01. Conduct of Business.........................................32
SECTION 4.02. No Solicitation.............................................37
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Proxy Statement;
Shareholders' Meeting.......................................40
SECTION 5.02. Access to Information; Confidentiality......................41
SECTION 5.03. Reasonable Best Efforts.....................................42
SECTION 5.04. Company Stock Options; ESPP.................................43
SECTION 5.05. Indemnification, Exculpation and Insurance..................45
SECTION 5.06. Fees and Expenses...........................................46
SECTION 5.07. Public Announcements........................................47
SECTION 5.08. Affiliates..................................................48
SECTION 5.09. Stock Exchange Listing......................................48
SECTION 5.10. Shareholder Litigation......................................48
SECTION 5.11. Employee Matters............................................48
SECTION 5.12. Company Notes...............................................50
SECTION 5.13. Rights Agreement............................................50
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger..50
SECTION 6.02. Conditions to Obligations of Parent and Sub.................51
SECTION 6.03. Conditions to Obligation of the Company.....................52
SECTION 6.04. Frustration of Closing Conditions...........................52
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination.................................................53
SECTION 7.02. Effect of Termination.......................................54
SECTION 7.03. Amendment...................................................54
SECTION 7.04. Extension; Waiver...........................................54
SECTION 7.05. Procedure for Termination or Amendment......................54
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties...............54
SECTION 8.02. Notices.....................................................55
SECTION 8.03. Definitions.................................................56
SECTION 8.04. Interpretation..............................................57
SECTION 8.05. Consents and Approvals......................................57
SECTION 8.06. Counterparts................................................58
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries..............58
SECTION 8.08. GOVERNING LAW...............................................58
SECTION 8.09. Assignment..................................................58
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction...............58
SECTION 8.11. Waiver of Jury Trial........................................58
SECTION 8.12. Severability................................................59
Annex I Index of Defined Terms
Exhibit A Restated Articles of Incorporation of the Surviving Corporation
Exhibit B Affiliate Letter
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement")
dated as of November 14, 2005, among XXXXXXX & XXXXXXX, a New Jersey corporation
("Parent"), SHELBY MERGER SUB, INC., an Indiana corporation and a wholly owned
Subsidiary of Parent ("Sub"), and GUIDANT CORPORATION, an Indiana corporation
(the "Company").
WHEREAS Parent, Sub and the Company entered into an Agreement and Plan
of Merger dated as of December 15, 2004 (the "Original Merger Agreement"), and
they now desire to amend and restate the Original Merger Agreement (it being
understood that all references to "the date hereof" or "the date of this
Agreement" refer to December 15, 2004);
WHEREAS the Board of Directors of each of the Company and Sub has
adopted, and the Board of Directors of Parent has approved, this Agreement and
the merger of Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, without par value, of the Company ("Company
Common Stock"), other than shares of Company Common Stock directly owned by
Parent, Sub or the Company, will be converted into the right to receive (a) a
number of validly issued, fully paid and nonassessable shares of common stock,
par value $1.00 per share, of Parent ("Parent Common Stock") and (b) $33.25 in
cash, without interest;
WHEREAS simultaneously with the execution and delivery of this
Agreement, Parent and the Company are entering into a Settlement Agreement for
the purpose of permanently settling and resolving any and all claims, disputes,
issues or matters that exist between them relating to the matters contemplated
by the Original Merger Agreement or raised by the litigation filed by the
Company with respect to the Original Merger Agreement, and agreeing to dismiss
such litigation with prejudice; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and subject to the
conditions set forth herein, the parties hereto 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 Business Corporation Law
of the State of Indiana (the "IBCL"), Sub shall be merged with and into the
Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation in the Merger (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Sub in accordance with
the IBCL.
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, which shall
be no later than the second business day after satisfaction or (to the extent
permitted by applicable Law) waiver of the conditions set forth in Article VI
(other than those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or (to the extent permitted by
applicable Law) waiver of those conditions), at the offices of Cravath, Swaine &
Xxxxx LLP, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
another time, date or place is agreed to in writing by Parent and the Company;
provided, however, that if all the conditions set forth in Article VI shall no
longer be satisfied or (to the extent permitted by applicable Law) waived on
such second business day, then the Closing shall take place on the first
business day on which all such conditions shall again have been satisfied or (to
the extent permitted by applicable Law) waived unless another time is agreed to
in writing by Parent and the Company. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
SECTION 1.03. Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on the Closing Date, the parties shall file with the
Secretary of State of the State of Indiana articles of merger (the "Articles of
Merger") executed and acknowledged by the parties in accordance with the
relevant provisions of the IBCL and, as soon as practicable on or after the
Closing Date, shall make all other filings or recordings required under
the
IBCL. The Merger shall become effective upon the filing of the Articles of
Merger with the Secretary of State of the State of Indiana, or at such later
time as Parent and the Company shall agree and shall specify in the Articles of
Merger (the time the Merger becomes effective being the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the effects
set forth in Section 23-1-40-6 of the IBCL.
SECTION 1.05. Articles of Incorporation and By-laws. (a) The Articles
of Incorporation of the Company (the "Company Articles") shall be amended at the
Effective Time to be in the form of Exhibit A and, as so amended, such Company
Articles shall be the Restated Articles of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
(b) The By-laws of Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable Law.
SECTION 1.06. Directors. The directors of Sub 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
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock, without par value, of the Surviving
Corporation.
(b) Cancelation of Treasury Stock and Parent-Owned Stock. Each share of
Company Common Stock that is directly owned by the Company, Parent or Sub
immediately prior to the Effective Time shall automatically be canceled and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Company Common Stock. Subject to Section 2.02(e),
each share of Company Common Stock issued and outstanding immediately prior to
the Effective Time (other than shares to be canceled in accordance with Section
2.01(b)) shall be converted into the right to receive (i) 0.493 (the "Exchange
Ratio") validly issued, fully paid and nonassessable shares of Parent Common
Stock (the "Stock Portion") and (ii) $33.25 in cash, without interest (the "Cash
Portion" and, together with the Stock Portion, the "Merger Consideration"). At
the Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
each holder of a certificate which immediately prior to the Effective Time
represented any such shares of Company Common Stock (each, a "Certificate")
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration, any dividends or other distributions payable pursuant
to Section 2.02(c) and cash in lieu of any fractional shares payable pursuant to
Section 2.02(e), in each case to be issued or paid in consideration therefor
upon surrender of such Certificate in accordance with Section 2.02(b), without
interest. Notwithstanding the foregoing, if between the date of this Agreement
and the Effective Time, (A) the outstanding shares of Parent Common Stock shall
have been changed into a different number of shares or a different class, by
reason of the occurrence or record date of any stock dividend, subdivision,
reclassification, recapitalization, split, combination, exchange of shares or
similar transaction, (B) Parent declares or pays cash dividends in any fiscal
quarter in excess of 200% of the amount of regularly quarterly dividends paid by
the Parent immediately prior to the date hereof or (C) Parent engages in any
spin-off or split-off, then in any such case the Exchange Ratio shall be
appropriately adjusted to reflect such action. The right of any holder of a
Certificate to receive the Merger Consideration, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) shall be subject to and
reduced by the amount of any withholding that is required under applicable tax
Law.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Prior to
the Effective Time, Parent shall appoint EquiServe Trust Company or another bank
or trust company that is reasonably satisfactory to the Company to act as
exchange agent (the "Exchange Agent") for the payment of the Merger
Consideration. At the Effective Time, Parent shall deposit, or cause the
Surviving Corporation to deposit, with the Exchange Agent, for the benefit of
the holders of Certificates, certificates representing shares of Parent Common
Stock and cash in an amount sufficient to pay the aggregate Merger Consideration
required to be paid pursuant to Section 2.01(c). In addition, Parent shall
deposit with the Exchange Agent, as necessary from time to time after the
Effective Time, any dividends or other distributions payable pursuant to Section
2.02(c) and cash in lieu of any fractional shares payable pursuant to Section
2.02(e). All shares of Parent Common Stock, cash, dividends and distributions
deposited with the Exchange Agent pursuant to this Section 2.02(a) shall
hereinafter be referred to as the "Exchange Fund".
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
record of a Certificate whose shares of Company Common Stock were converted into
the right to receive the Merger Consideration, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and which shall be in customary form and
contain customary provisions) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash in
lieu of any fractional shares payable pursuant to Section 2.02(e). Each holder
of record of one or more Certificates shall, upon surrender to the Exchange
Agent of such Certificate or Certificates, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, be entitled to receive in exchange therefor (i)
the amount of cash to which such holder is entitled pursuant to Section 2.01(c),
(ii) a certificate or certificates representing that number of whole shares of
Parent Common Stock (after taking into account all Certificates surrendered by
such holder) to which such holder is entitled pursuant to Section 2.01(c) (which
shall be in uncertificated book entry form unless a physical certificate is
requested), (iii) any dividends or distributions payable pursuant to Section
2.02(c) and (iv) cash in lieu of any fractional shares payable pursuant to
Section 2.02(e), and the Certificates so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Company Common Stock which
is not registered in the transfer records of the Company, payment of the Merger
Consideration in accordance with this Section 2.02(b) may be made to a person
other than the person in whose name the Certificate so surrendered is registered
if such Certificate shall be properly endorsed or otherwise be in proper form
for transfer and the person requesting such payment shall pay any transfer or
other taxes required by reason of the payment of the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash in
lieu of any fractional shares payable pursuant to Section 2.02(e) to a person
other than the registered holder of such Certificate or establish to the
reasonable satisfaction of Parent that such taxes have been paid or are not
applicable. Until surrendered as contemplated by this Section 2.02(b), each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash in
lieu of any fractional shares payable pursuant to Section 2.02(e). No interest
shall be paid or will accrue on any payment to holders of Certificates pursuant
to the provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Parent Common Stock that the holder thereof has
the right to receive upon the surrender thereof, and no cash payment in lieu of
fractional shares of Parent Common Stock shall be paid to any such holder
pursuant to Section 2.02(e), in each case until the holder of such Certificate
shall have surrendered such Certificate in accordance with this Article II.
Following the surrender of any Certificate, there shall be paid to the record
holder of the certificate representing whole shares of Parent Common Stock
issued in exchange therefor, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Parent Common Stock and the amount of any cash payable in lieu of a fractional
share of Parent Common Stock to which such holder is entitled pursuant to
Section 2.02(e) and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to such surrender and a payment date subsequent to such surrender payable
with respect to such whole shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Common Stock. The Merger
Consideration, any dividends or other distributions payable pursuant to Section
2.02(c) and cash in lieu of any fractional shares payable pursuant to Section
2.02(e) paid 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 shares of Company Common Stock formerly represented by
such Certificates. At the close of business on the day on which the Effective
Time occurs, the share transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the share transfer books of the
Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, any Certificate is presented to the Surviving Corporation for transfer, it
shall be canceled against delivery of the Merger Consideration, any dividends or
other distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) to the holder thereof as
provided in this Article II.
(e) No Fractional Shares. (i) No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividends or other distributions of Parent shall
relate to such fractional share interests and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a shareholder of
Parent.
(ii) In lieu of such fractional share interests, Parent shall pay to
each holder of a Certificate an amount in cash equal to the product obtained by
multiplying (A) the fractional share interest to which such holder (after taking
into account all shares of Company Common Stock formerly represented by all
Certificates surrendered by such holder) would otherwise be entitled by (B) the
per share closing price of Parent Common Stock on the Closing Date (the "Closing
Price"), as such price is reported on the New York Stock Exchange, Inc. (the
"NYSE") Composite Transaction Tape (as reported by Bloomberg Financial Markets
or such other source as the parties shall agree in writing).
(f) Termination of the Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of the Certificates who have not theretofore complied with this Article
II shall thereafter look only to Parent for, and Parent shall remain liable for,
payment of their claim for the Merger Consideration, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e) in accordance with this
Article II.
(g) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any person in respect of
any shares of Parent Common Stock, cash, dividends or other distributions from
the Exchange Fund properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. If any Certificate shall
not have been surrendered prior to four years after the Effective Time (or
immediately prior to such earlier date on which any Merger Consideration (and
any dividends or other distributions payable with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable with respect
thereto pursuant to Section 2.02(e)) would otherwise escheat to or become the
property of any Governmental Entity), any such Merger Consideration (and any
dividends or other distributions payable with respect thereto pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable with respect
thereto pursuant to Section 2.02(e)) shall, to the extent permitted by
applicable Law, become the property of Parent, free and clear of all claims or
interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest the
cash included in the Exchange Fund as directed by Parent. Any interest and other
income resulting from such investments shall be paid to and be income of Parent.
If for any reason (including losses) the cash in the Exchange Fund shall be
insufficient to fully satisfy all of the payment obligations to be made in cash
by the Exchange Agent hereunder, Parent shall promptly deposit cash into the
Exchange Fund in an amount which is equal to the deficiency in the amount of
cash required to fully satisfy such cash payment obligations.
(i) 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
Parent, the posting by such person of a bond in such reasonable amount as Parent
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent shall deliver in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and cash in
lieu of any fractional shares payable pursuant to Section 2.02(e), in each case
pursuant to this Article II.
(j) Withholding Rights. Parent, the Surviving Corporation or the
Exchange Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Certificates such
amounts as Parent, the Surviving Corporation or the Exchange Agent is required
to deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax Law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority by Parent, the Surviving
Corporation or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of Certificates
in respect of which such deduction and withholding was made by Parent, the
Surviving Corporation or the Exchange Agent.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company. Except as
disclosed in the Company SEC Documents filed by the Company and publicly
available prior to November 14, 2005 ("Filed Company SEC Documents"), and except
as set forth in (i) the disclosure schedule delivered by the Company to Parent
prior to the execution of the Original Merger Agreement and (ii) the supplement
thereto delivered by the Company to Parent prior to the execution of this
Agreement (collectively, the "Company Disclosure Schedule") (with specific
reference to the particular Section or subsection of this Agreement to which the
information set forth in such disclosure schedule relates; provided, however,
that any information set forth in one section of the Company Disclosure Schedule
shall be deemed to apply to each other Section or subsection thereof to which
its relevance is readily apparent on its face), the Company represents and
warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. Each of the Company and
its Subsidiaries has been duly organized, and is validly existing and in good
standing (with respect to jurisdictions that recognize that concept) under the
Laws of the jurisdiction of its incorporation or formation, as the case may be,
and has all requisite power and authority and possesses all governmental
licenses, permits, authorizations and approvals necessary to enable it to use
its corporate or other name and to own, lease or otherwise hold and operate its
properties and other assets and to carry on its business as currently conducted,
except where the failure to have such governmental licenses, permits,
authorizations or approvals individually or in the aggregate has not had and
would not reasonably be expected to have a Material Adverse Effect. Each of the
Company and its Subsidiaries is duly qualified or licensed to do business and is
in good standing (with respect to jurisdictions that recognize that concept) in
each jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification, licensing or good
standing necessary, other than in such jurisdictions where the failure to be so
qualified, licensed or in good standing individually or in the aggregate has not
had and would not reasonably be expected to have a Material Adverse Effect. The
Company has made available to Parent, prior to the date of this Agreement,
complete and accurate copies of the Company Articles and the Company's By-laws
(the "Company By-laws"), and the comparable organizational documents of each
Significant Subsidiary (as such term is defined in Rule 12b-2 under the Exchange
Act), in each case as amended to the date hereof.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure Schedule
lists, as of the date hereof, (i) each Significant Subsidiary of the Company
(including its state of incorporation or formation) and (ii) each other
Subsidiary of the Company. All of the outstanding capital stock of, or other
equity interests in, each Significant Subsidiary of the Company, is directly or
indirectly owned by the Company. All the issued and outstanding shares of
capital stock of, or other equity interests in, each such Subsidiary owned by
the Company have been validly issued and are fully paid and nonassessable and
are owned directly or indirectly by the Company free and clear of all pledges,
liens, charges, encumbrances or security interests of any kind or nature
whatsoever (other than liens, charges and encumbrances for current taxes not yet
due and payable) (collectively, "Liens"), and free of any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other equity
interests. Except with respect to securities of non-Affiliates that, to the
Knowledge of the Company, do not constitute a 20% or greater interest in such
non-Affiliates (or a 5% or greater interest in such non-Affiliates if the
Company's investment therein is greater than $20,000,000), and except for the
capital stock of, or voting securities or equity interests in, its Subsidiaries,
the Company does not own, directly or indirectly, as of the date hereof, any
capital stock of, or other voting securities or equity interests in, any
corporation, partnership, joint venture, association or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 1,000,000,000 shares of Company Common Stock and 50,000,000 shares
of preferred stock, without par value ("Company Preferred Stock"). 1,500,000
shares of Company Preferred Stock have been designated as Series A Participating
Preferred Stock, without par value (the "Company Series A Preferred Stock"). At
the close of business on October 31, 2005, (i) 332,448,023 shares of Company
Common Stock were issued and outstanding (which number includes (A) 708,755
shares of Company Common Stock held by the Company in its treasury, (B)
1,382,196 shares of Company Common Stock held by the trust established under The
Guidant Employee Savings and Stock Ownership Plan and (C) 1,084,669 shares of
Company Common Stock subject to vesting and restrictions on transfer ("Company
Restricted Stock")), (ii) 28,029,833 shares of Company Common Stock were
reserved and available for issuance pursuant to the Company's 1994 Stock Plan,
as amended, 1996 Nonemployee Director Stock Plan, as amended, 1998 Stock Plan,
as amended, and 2001 Employee Stock Purchase Plan (the "ESPP") (such plans,
collectively, the "Company Stock Plans"), of which 26,067,053 shares of Company
Common Stock were subject to outstanding Company Stock Options or agreements to
issue Company Stock Options, and (iii) no shares of Company Preferred Stock
(including Company Series A Preferred Stock) were issued or outstanding or were
held by the Company as treasury shares. Except as set forth above in this
Section 3.01(c), at the close of business on October 31, 2005, no shares of
capital stock or other voting securities or equity interests of the Company were
issued, reserved for issuance or outstanding. At the close of business on
October 31, 2005, there were no outstanding stock appreciation rights, "phantom"
stock rights, restricted stock units, performance units, rights to receive
shares of Company Common Stock on a deferred basis or other rights (other than
Company Stock Options) that are linked to the value of Company Common Stock
(collectively, "Company Stock-Based Awards"). All outstanding options to
purchase shares of Company Common Stock exclusive of rights under the ESPP
(collectively, "Company Stock Options") and shares of Company Restricted Stock
are evidenced by stock option agreements, restricted stock purchase agreements
or other award agreements. All outstanding shares of capital stock of the
Company are, and all shares which may be issued pursuant to the Company Stock
Options or Company Stock-Based Awards will be, when issued in accordance with
the terms thereof, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which shareholders of the Company may vote. Except as set forth above in this
Section 3.01(c) and for issuances of shares of Company Common Stock pursuant to
the Company Stock Options set forth above in this Section 3.01(c) and subject to
Section 4.01(a), (x) there are not issued, reserved for issuance or outstanding
(A) any shares of capital stock or other voting securities or equity interests
of the Company, (B) any securities of the Company convertible into or
exchangeable or exercisable for shares of capital stock or other voting
securities or equity interests of the Company, (C) any warrants, calls, options
or other rights to acquire from the Company or any of its Subsidiaries, and no
obligation of the Company or any of its Subsidiaries to issue, any capital
stock, voting securities, equity interests or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company or (D) any Company Stock-Based Awards and (y) there are not any
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. Neither the Company
nor any of its Subsidiaries is a party to any voting Contract with respect to
the voting of any such securities. Except as set forth above in this Section
3.01(c) and subject to Section 4.01(a), there are no outstanding (1) securities
of the Company or any of its Subsidiaries convertible into or exchangeable or
exercisable for shares of capital stock or voting securities or equity interests
of any Subsidiary of the Company, (2) warrants, calls, options or other rights
to acquire from the Company or any of its Subsidiaries, and no obligation of the
Company or any of its Subsidiaries to issue, any capital stock, voting
securities, equity interests or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of any Subsidiary of the
Company or (3) obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any such outstanding securities or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Authority; Noncontravention. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and, subject
to receipt of the Shareholder Approval, 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 and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement, subject, in the case of the
consummation of the Merger, to the obtaining of the Shareholder Approval. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or similar Laws
affecting the rights of creditors generally and the availability of equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Board of Directors of the Company, at a
meeting duly called and held, duly and unanimously adopted by all directors
present, resolutions (i) adopting this Agreement, the Merger and the other
transactions contemplated by this Agreement, (ii) declaring that it is in the
best interests of the Company and the shareholders of the Company that the
Company enter into this Agreement and consummate the Merger and the other
transactions contemplated by this Agreement on the terms and subject to the
conditions set forth in this Agreement, (iii) directing that the Company use its
reasonable best efforts to submit the approval of this Agreement to a vote at a
meeting of the shareholders of the Company as promptly as practicable, and (iv)
recommending that the shareholders of the Company approve this Agreement, which
resolutions, as of November 14, 2005, have not been subsequently rescinded,
modified or withdrawn in any way. The execution and delivery of this Agreement
by the Company do not, and the consummation by the Company of the Merger and the
other transactions contemplated by this Agreement and compliance by the Company
with the provisions of this Agreement will not, conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets of
the Company or any of its Subsidiaries under, (x) the Company Articles or the
Company By-laws or the comparable organizational documents of any of its
Subsidiaries, (y) any loan or credit agreement, bond, debenture, note, mortgage,
indenture, lease, supply agreement, license agreement, development agreement or
other contract, agreement, obligation, commitment or instrument that is intended
by the Company, Parent or any of their respective Subsidiaries, as applicable,
to be legally binding, (each, including all amendments thereto, a "Contract"),
to which the Company or any of its Subsidiaries is a party or any of their
respective properties or other assets is subject or (z) subject to the obtaining
of the Shareholder Approval and the governmental filings and other matters
referred to in the following sentence, any (A) statute, law, ordinance, rule or
regulation (each, a "Law") applicable to the Company or any of its Subsidiaries
or their respective properties or other assets or (B) order, writ, injunction,
decree, judgment or stipulation (each, an "Order") applicable to the Company or
any of its Subsidiaries or their respective properties or other assets, other
than, in the case of clauses (y) and (z), any such conflicts, violations,
breaches, defaults, rights of termination, cancelation or acceleration, losses
or Liens that individually or in the aggregate have not had and would not
reasonably be expected to (x) have a Material Adverse Effect, (y) impair in any
material respect the ability of the Company to perform its obligations under
this Agreement or (z) prevent or materially impede, interfere with, hinder or
delay the consummation of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any organized securities exchange (each, 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 of the Merger or the other transactions
contemplated by this Agreement, except for (1) (A) the filing of a premerger
notification and report form by the Company under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act") and the termination of the waiting period required
thereunder, (B) all required notifications and filings by the Company under
Article 4 of Council Regulation 139/2004 of the European Community, as amended
(the "EC Merger Regulation"), and the receipt of a decision under Article
6(1)(b), 8(1) or 8(2) thereunder declaring the Merger compatible with the EC
Common Market and (C) the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under any other applicable competition,
merger control, antitrust or similar Law, (2) the filing with the Securities and
Exchange Commission (the "SEC") of (X) a proxy statement relating to the
adoption by the shareholders of the Company of this Agreement (as amended or
supplemented from time to time, the "Proxy Statement") and (Y) such reports
under the Securities Exchange Act of 1934, as amended (including the rules and
regulations promulgated thereunder, the "Exchange Act"), as may be required in
connection with this Agreement and the transactions contemplated by this
Agreement, (3) the filing of the Articles of Merger with the Secretary of State
of the State of Indiana and appropriate documents with the relevant authorities
of other states in which the Company or any of its Subsidiaries is qualified to
do business, (4) any filings with and approvals of the NYSE and (5) such other
consents, approvals, orders, authorizations, actions, registrations,
declarations and filings the failure of which to be obtained or made
individually or in the aggregate has not had and would not reasonably be
expected to (x) have a Material Adverse Effect, (y) impair in any material
respect the ability of the Company to perform its obligations under this
Agreement or (z) prevent or materially impede, interfere with, hinder or delay
the consummation of the transactions contemplated by this Agreement.
(e) Company SEC Documents. (i) The Company has filed all reports,
schedules, forms, statements and other documents (including exhibits and other
information incorporated therein) with the SEC required to be filed by the
Company since January 1, 2003 (such documents, together with any documents filed
during such period by the Company with the SEC on a voluntary basis on Current
Reports on Form 8-K, the "Company SEC Documents"). As of their respective filing
dates, the Company SEC Documents complied in all material respects with, to the
extent in effect at the time of filing, the requirements of the Securities Act
of 1933, as amended (including the rules and regulations promulgated thereunder,
the "Securities Act"), the Exchange Act and the Xxxxxxxx-Xxxxx Act of 2002
(including the rules and regulations promulgated thereunder, "SOX") applicable
to such Company SEC Documents, and none of the Company SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Company SEC
Document has been revised, amended, supplemented or superseded by a later-filed
Company SEC Document, none of the Company SEC Documents contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, which individually
or in the aggregate would require an amendment, supplement or corrective filing
to such Company SEC Documents. Each of the financial statements (including the
related notes) of the Company included in the Company SEC Documents complied at
the time it was filed as to form in all material respects with the applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto in effect at the time of filing, had been prepared in accordance
with generally accepted accounting principles in the United States ("GAAP")
(except, in the case of unaudited statements, as permitted by the rules and
regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly presented
in all material respects the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which individually or in the aggregate have had or would reasonably be expected
to have a Material Adverse Effect. None of the Subsidiaries of the Company are,
or have at any time since January 1, 2003 been, subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act.
(ii) Each of the principal executive officer of the Company and the
principal financial officer of the Company (or each former principal executive
officer of the Company and each former principal financial officer of the
Company, as applicable) 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 true and accurate. For purposes of this Agreement, "principal executive
officer" and "principal financial officer" shall have the meanings given to such
terms in SOX. Neither the Company nor any of its Subsidiaries has outstanding,
or has arranged any outstanding, "extensions of credit" to directors or
executive officers within the meaning of Section 402 of SOX.
(iii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are executed in
accordance with management's general or specific authorizations; (B) access to
assets is permitted only in accordance with management's general or specific
authorization; and (C) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(iv) The Company's "disclosure controls and procedures" (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably designed to
ensure that all information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and that all such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the chief executive officer and chief financial officer of
the Company required under the Exchange Act with respect to such reports.
(f) Information Supplied. None of the information supplied or to be
supplied by or on behalf of the Company specifically for inclusion or
incorporation by reference in (i) the Form S-4 to be filed with the SEC by
Parent in connection with the issuance of shares of Parent Common Stock in the
Merger will, at the time the Form S-4 is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading or (ii) the Proxy Statement will, at the
date it is first mailed to the shareholders of the Company and at the time of
the Shareholders' Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, except that no representation or warranty is made
by the Company with respect to statements made or incorporated by reference
therein based on information supplied by or on behalf of Parent or Sub
specifically for inclusion or incorporation by reference in the Form S-4 or the
Proxy Statement. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act.
(g) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or as expressly permitted pursuant to
Section 4.01(a)(i) through (xvi), since the date of the most recent financial
statements included in the Filed Company SEC Documents, the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary
course consistent with past practice, and there has not been any Material
Adverse Change, and from such date until the date hereof there has not been (i)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any capital stock of the
Company or any of its Subsidiaries, other than (x) cash dividends payable by the
Company in respect of shares of Company Common Stock consistent with past
practice and not exceeding $0.10 per share of Company Common Stock per fiscal
quarter or (y) dividends or distributions by a direct or indirect wholly owned
Subsidiary of the Company to its shareholders, (ii) any purchase, redemption or
other acquisition by the Company or any of its Subsidiaries of any shares of
capital stock or any other securities of the Company or any of its Subsidiaries
or any options, warrants, calls or rights to acquire such shares or other
securities, other than in connection with net share withholding in connection
with the vesting of Company Restricted Stock, (iii) any split, combination or
reclassification of any capital stock of the Company or any of its Subsidiaries
or any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of their respective capital
stock, (iv) (A) any granting by the Company or any of its Subsidiaries to any
current or former (1) director of the Company or any of its Subsidiaries or (2)
employee of the Company or any of its Subsidiaries who is treated as a Tier I
Employee (a "Tier I Employee") or Tier II Employee (a "Tier II Employee") for
purposes of the Company's Change in Control Severance Pay Plan for Select
Employees (all individuals described in the foregoing clauses (1) and (2) of
this clause (A), collectively, the "Key Personnel") of any increase in
compensation, bonus or fringe or other benefits, except for normal increases in
cash compensation (including cash bonuses) in the ordinary course of business
consistent with past practice or as was required under any Company Benefit
Agreement or Company Benefit Plan, (B) any granting by the Company or any of its
Subsidiaries to any Key Personnel of (1) any increase in severance or
termination pay or (2) any right to receive any severance or termination pay
except for severance or termination pay received in the ordinary course of
business consistent with past practice or as was required under any Company
Benefit Agreement or Company Benefit Plan, (C) any entry by the Company or any
of its Subsidiaries into, or any amendments of, (1) any employment, deferred
compensation, consulting, severance, change of control, termination or
indemnification Contract with any Key Personnel or (2) any Contract with any Key
Personnel the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of a nature contemplated by this Agreement (all such Contracts under this clause
(C), collectively, "Company Benefit Agreements"), (D) the removal or
modification of any restrictions in any Company Benefit Agreement or Company
Benefit Plan or awards made thereunder, except as required to comply with
applicable Law or any Company Benefit Agreement or Company Benefit Plan in
effect as of the date hereof or (E) the adoption, amendment or termination of
any Company Benefit Plan, other than, in the cases of clauses (A), (B), (C) and
(D), such increases, amendments, new agreements, removals, modifications or
terminations with respect to Tier II Employees that (1) do not provide for any
increase in compensation or benefits for any individual Tier II Employee that is
material in relation to such Tier II Employee's compensation or benefits prior
to such increase and (2) in the aggregate do not result in any material increase
in compensation, benefits or other similar expenses of the Company and its
Subsidiaries, (v) any damage, destruction or loss, whether or not covered by
insurance, that individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect, (vi) any change in accounting
methods, principles or practices by the Company materially affecting its assets,
liabilities or businesses, except insofar as may have been required by a change
in GAAP or (vii) any material tax election or any settlement or compromise of
any material income tax liability.
(h) Litigation. Except with respect to taxes, which are the subject of
Section 3.01(n), there is no suit, action or proceeding pending or, to the
Knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect, nor is there any demand, letter or Order of any Governmental Entity or
arbitrator outstanding against, or, to the Knowledge of the Company,
investigation by any Governmental Entity involving, the Company or any of its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect.
(i) Contracts. (1) As of the date hereof, neither the Company nor any
of its Subsidiaries is a party to, and none of their respective properties or
other assets is subject to, any Contract that is a "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (a "Material
Contract"). None of the Company, any of its Subsidiaries or, to the Knowledge of
the Company, any other party thereto is in violation of or in default under (nor
does there exist any condition which upon the passage of time or the giving of
notice or both would cause such a violation of or default by the Company or any
of its Subsidiaries or, to the Knowledge of the Company, any other party thereto
under) any Contract to which it is a party or by which it or any of its
properties or other assets is bound, except for violations or defaults that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has entered into any Contract that is currently in effect that is
required to be disclosed pursuant to Item 404 of Regulation S-K of the SEC.
(2) Section 3.01(i)(2) of the Company Disclosure Schedule
contains a complete and accurate list, as of the date hereof, of (A) each
material Contract restricting or purporting to restrict any of the Company's
Affiliates' ability to compete (other than each such Contract that only
restricts the Company's Subsidiaries' ability to compete) in any line of
business, geographic area or customer segment, (B) each material Contract
restricting the Company's or any of its Subsidiaries' ability to compete in any
line of business, geographic area or customer segment and (C) each material
Contract relating to distribution, sale, supply, licensing, co-promotion or
manufacturing of any products or services of the Company or any of its
Subsidiaries or any products licensed by the Company or any of its Subsidiaries.
(j) Compliance with Laws; Environmental Matters. (i) Except with
respect to Environmental Laws, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), taxes and regulatory compliance, which are the
subjects of Sections 3.01(j)(ii), 3.01(l), 3.01(n) and 3.01(u), respectively,
each of the Company and its Subsidiaries is in compliance with all Laws and
Orders (collectively, "Legal Provisions") applicable to it, its properties or
other assets or its business or operations, except for failures to be in
compliance that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. Each of the Company
and its Subsidiaries has in effect all approvals, authorizations, certificates,
filings, franchises, licenses, notices and permits of or with all Governmental
Entities (collectively, "Permits"), including all Permits under the Federal
Food, Drug and Cosmetic Act of 1938, as amended (including the rules and
regulations promulgated thereunder, the "FDCA"), necessary for it to own, lease
or operate its properties and other assets and to carry on its business and
operations as currently conducted, except where the failure to have such Permits
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. Since January 1, 2000, there has
occurred no default under, or violation of, any such Permit, except for any such
default or violation that individually or in the aggregate has not had and would
not reasonably be expected to have a Material Adverse Effect. The consummation
of the Merger, in and of itself, would not cause the revocation or cancelation
of any such Permit that individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect.
(ii) Except for those matters that individually or in the aggregate
have not had and would not reasonably be expected to have a Material Adverse
Effect: (A) during the period of ownership or operation by the Company or any of
its Subsidiaries of any of its currently or formerly owned, leased or operated
properties, there have been no Releases of Hazardous Materials in, on, under or
affecting any properties which would subject the Company or any of its
Subsidiaries to any liability under any Environmental Law or require any
expenditure by the Company or any of its Subsidiaries for remediation to meet
applicable standards thereunder; (B) prior to and after, as applicable, the
period of ownership or operation by the Company or any of its Subsidiaries of
any of its currently or formerly owned, leased or operated properties, to the
Knowledge of the Company, there were no Releases of Hazardous Materials in, on,
under or affecting any properties which would subject the Company or any of its
Subsidiaries to any liability under any Environmental Law or require any
expenditure by the Company or any of its Subsidiaries for remediation to meet
applicable standards thereunder; (C) neither the Company nor any of its
Subsidiaries is subject to any indemnity obligation or other Contract with any
person relating to obligations or liabilities under Environmental Laws; and (D)
to the Knowledge of the Company, there are no facts, circumstances or conditions
that would reasonably be expected to form the basis for any investigation, suit,
claim, action, proceeding or liability against or affecting the Company or any
of its Subsidiaries relating to or arising under Environmental Laws. The term
"Environmental Laws" means all applicable Federal, state, local and foreign Laws
(including the common law), Orders, notices, Permits or binding Contracts
issued, promulgated or entered into by any Governmental Entity, relating in any
way to the environment, preservation or reclamation of natural resources or the
presence, management, Release of, or exposure to, Hazardous Materials, or to
human health and safety. The term "Hazardous Materials" means (1) petroleum
products and by-products, asbestos and asbestos-containing materials, urea
formaldehyde foam insulation, medical or infectious wastes, polychlorinated
biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other
ozone-depleting substances and (2) any other chemical, material, substance,
waste, pollutant or contaminant that is prohibited, limited or regulated by or
pursuant to any Environmental Law. The term "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing or migrating into or through the environment or any
natural or man-made structure.
(k) Labor Relations. From the date of the most recent financial
statements included in the Filed Company SEC Documents through the date hereof,
there has not been any adoption, material amendment or termination by the
Company or any of its Subsidiaries of any collective bargaining or other labor
union Contract to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound. There are no collective
bargaining or other labor union Contracts to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound. As of the date of this Agreement, none of the employees of the Company or
any of its Subsidiaries are represented by any union with respect to their
employment by the Company or such Subsidiary. Since January 1, 2003, neither the
Company nor any of its Subsidiaries has experienced any material labor disputes,
union organization attempts or work stoppages, slowdowns or lockouts due to
labor disagreements.
(l) ERISA Compliance. (i) Section 3.01(l)(i) of the Company Disclosure
Schedule contains a complete and accurate list, as of the date hereof, of each
employment, bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock appreciation, restricted
stock, stock option, "phantom" stock, performance, retirement, thrift, savings,
stock bonus, paid time off, perquisite, fringe benefit, vacation, severance,
disability, death benefit, hospitalization, medical, welfare benefit or other
plan, program, policy or Contract maintained, contributed to or required to be
maintained or contributed to by the Company or any of its Subsidiaries or any
other person or entity that, together with the Company, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code (each, a "Commonly
Controlled Entity") (exclusive of any such plan, program, policy or Contract
mandated by and maintained solely pursuant to applicable law), in each case
providing benefits to any current or former director, officer or employee of the
Company or any of its Subsidiaries (collectively, but exclusive of individual
option and restricted award agreements issued under the Company Stock Plans, the
"Company Benefit Plans") and each Company Benefit Agreement (exclusive of local
offer letters mandated under applicable non-U.S. law that do not impose any
severance obligations other than any mandatory statutory severance). Each
Company Benefit Plan that is an "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) is sometimes referred to herein as a "Company Pension
Plan" and each Company Benefit Plan that is an "employee welfare benefit plan"
(as defined in Section 3(1) of ERISA) is sometimes referred to herein as a
"Company Welfare Plan".
(ii) The Company has provided to Parent complete and accurate copies of
(A) each Company Benefit Plan or, at the Company's option, in the case of
Company Benefit Plans maintained primarily for the benefit of individuals
regularly employed outside the United States, a summary thereof (or, in either
case, with respect to any unwritten Company Benefit Plans, descriptions thereof)
and Company Benefit Agreements (exclusive of local offer letters mandated under
applicable non-U.S. law that do not impose any severance obligations other than
any mandatory statutory severance), (B) the two most recent annual reports on
Form 5500 required to be filed with the Internal Revenue Service (the "IRS")
with respect to each Company Benefit Plan (if any such report was required), (C)
the most recent summary plan description for each Company Benefit Plan for which
such summary plan description is required and (D) each trust Contract and
insurance or group annuity Contract relating to any Company Benefit Plan.
(iii) Each Company Benefit Plan has been administered in all material
respects in accordance with its terms. The Company, its Subsidiaries and all the
Company Benefit Plans are all in compliance in all material respects with the
applicable provisions of ERISA, the Code and all other applicable Laws,
including Laws of foreign jurisdictions, and the terms of all collective
bargaining Contracts.
(iv) All Company Pension Plans intended to be tax-qualified have
received favorable determination letters from the IRS with respect to "TRA" (as
defined in Section 1 of IRS Rev. Proc. 93-39), and have timely filed with the
IRS determination letter applications (or have received such a determination
letter) with respect to "GUST" (as defined in Section 1 of IRS Notice 2001-42),
to the effect that such Company Pension Plans are qualified and exempt from
Federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code, no such determination letter has been revoked (nor, to the Knowledge of
the Company, has revocation been threatened) and to the Knowledge of the
Company, no event has occurred since the date of the most recent determination
letter or application therefor relating to any such Company Pension Plan that
would reasonably be expected to adversely affect the qualification of such
Company Pension Plan or materially increase the costs relating thereto or
require security under Section 307 of ERISA. The Company has provided to Parent
a complete and accurate copy of the most recent determination letter received
prior to the date hereof with respect to each Company Pension Plan, as well as a
complete and accurate copy of each pending application for a determination
letter, if any. The Company has also provided to Parent a complete and accurate
list of all amendments to any Company Pension Plan as to which a favorable
determination letter has not yet been received.
(v) Neither the Company nor any Commonly Controlled Entity has, during
the six-year period ending on the date hereof, maintained, contributed to or
been required to contribute to any Company Pension Plan that is subject to Title
IV of ERISA or Section 412 of the Code, or any "multiemployer plan" as defined
in Section 3(37) or 4001(a)(3) of ERISA. Except as has not had and would not
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any Commonly Controlled Entity has any unsatisfied liability under Title IV
of ERISA. To the Knowledge of the Company, no condition exists that presents a
material risk to the Company or any Commonly Controlled Entity of incurring a
material liability under Title IV of ERISA. The Pension Benefit Guaranty
Corporation has not instituted proceedings under Section 4042 of ERISA to
terminate any Company Benefit Plan and, to the Knowledge of the Company, no
condition exists that presents a material risk that such proceedings will be
instituted.
(vi) Except as has not had and would not reasonably be expected to have
a Material Adverse Effect, (A) all reports, returns and similar documents with
respect to all Company Benefit Plans required to be filed with any Governmental
Entity or distributed to any Company Benefit Plan participant have been duly and
timely filed or distributed, (B) none of the Company or any of its Subsidiaries
has received notice of, and to the Knowledge of the Company, there are no
investigations by any Governmental Entity with respect to, termination
proceedings or other claims (except claims for benefits payable in the normal
operation of the Company Benefit Plans), suits or proceedings against or
involving any Company Benefit Plan or asserting any rights or claims to benefits
under any Company Benefit Plan that could reasonably be expected to give rise to
any material liability and (C) to the Knowledge of the Company, there are not
any facts that could give rise to any liability in the event of any such
investigation, claim, suit or proceeding.
(vii) Except as has not had and would not reasonably be expected to
have a Material Adverse Effect, (A) all contributions, premiums and benefit
payments under or in connection with the Company Benefit Plans that are required
to have been made as of the date hereof in accordance with the terms of the
Company Benefit Plans have been timely made or have been reflected on the most
recent consolidated balance sheet filed or incorporated by reference into the
Filed Company SEC Documents and (B) no Company Pension Plan has an "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived.
(viii) With respect to each Company Benefit Plan, except as has not had
and would not reasonably be expected to have a Material Adverse Effect, (A)
there has not occurred any prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) in which the Company or any of its
Subsidiaries or any of their respective employees, or, to the Knowledge of the
Company, any trustee, administrator or other fiduciary of such Company Benefit
Plan, or any agent of the foregoing, has engaged that could reasonably be
expected to subject the Company or any of its Subsidiaries or any of their
respective employees, or any such trustee, administrator or other fiduciary, to
the tax or penalty on prohibited transactions imposed by Section 4975 of the
Code or the sanctions imposed under Title I of ERISA and (B) neither the
Company, any of its Subsidiaries or any of their respective employees nor, to
the Knowledge of the Company, any trustee, administrator or other fiduciary of
any Company Benefit Plan nor any agent of any of the foregoing, has engaged in
any transaction or acted in a manner, or failed to act in a manner, that could
reasonably be expected to subject the Company or any of its Subsidiaries or any
of their respective employees or, to the Knowledge of the Company, any such
trustee, administrator or other fiduciary, to any liability for breach of
fiduciary duty under ERISA or any other applicable Law.
(ix) Each Company Welfare Plan may be amended or terminated (including
with respect to benefits provided to retirees and other former employees)
without material liability to the Company or any of its Subsidiaries at any time
after the Effective Time. Each of the Company and its Subsidiaries complies in
all material respects with the applicable requirements of Section 4980B(f) of
the Code, Sections 601-609 of ERISA or any similar state or local Law with
respect to each Company Benefit Plan that is a group health plan, as such term
is defined in Section 5000(b)(1) of the Code or such state Law. Neither the
Company nor any of its Subsidiaries has any material obligations for health or
life insurance benefits following termination of employment under any Company
Benefit Plan (other than for continuation coverage required under Section
4980(B)(f) of the Code).
(x) None of the execution and delivery of this Agreement, the obtaining
of the Shareholder Approval or the consummation of the Merger or any other
transaction contemplated by this Agreement (alone or in conjunction with any
other event, including as a result of any termination of employment on or
following the Effective Time) will (A) entitle any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries to
severance or termination pay, (B) accelerate the time of payment or vesting, or
trigger any payment or funding (through a grantor trust or otherwise) of,
compensation or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any Company Benefit Plan or Company Benefit
Agreement or (C) result in any breach or violation of, or a default under, any
Company Benefit Plan or Company Benefit Agreement.
(xi) Neither the Company nor any of its Subsidiaries has any material
liability or obligations, including under or on account of a Company Benefit
Plan, arising out of the hiring of persons to provide services to the Company or
any of its Subsidiaries and treating such persons as consultants or independent
contractors and not as employees of the Company or any of its Subsidiaries. No
current or former independent contractor that provides or provided personal
services to the Company or its Subsidiaries (other than a current or former
director) is entitled to any material fringe or other benefits (other than cash
consulting fees) pursuant to any plan, program, policy or Contract to which the
Company or any of its Subsidiaries is a party or which is maintained, sponsored
or contributed to by the Company or any of its Subsidiaries.
(xii) No material deduction by the Company or any of its Subsidiaries
in respect of any "applicable employee remuneration" (within the meaning of
Section 162(m) of the Code) has been disallowed or is subject to disallowance by
reason of Section 162(m) of the Code. For each of the Key Personnel, the Company
has previously provided to Parent (A) accurate Form W-2 information for the
1999, 2000, 2001, 2002 and 2003 calendar years, (B) annual base salary as of the
date hereof, actual bonus earned for the 2003 calendar year and target annual
bonus for the 2004 calendar year and (C) a list, as of the date hereof, of all
outstanding Company Stock Options, Company Restricted Stock and Company
Stock-Based Awards granted under the Company Stock Plans or otherwise (other
than rights under the ESPP), together with (as applicable) the number of shares
of Company Common Stock subject thereto, and the grant dates, expiration dates,
exercise or base prices and vesting schedules thereof, (D) estimated current
annual cost of welfare benefits and (E) estimated cost of the pension benefit
enhancement under Section 8 of the Company's Change in Control Severance Plan
for Select Employees.
(m) No Parachute Gross Up. Except as provided in accordance with the
Company's Change in Control Severance Pay Plan for Select Employees, no current
or former employee or director of the Company or any of its Subsidiaries is
entitled to receive any additional payment from the Company or any of its
Subsidiaries or the Surviving Corporation by reason of the excise tax required
by Section 4999(a) of the Code being imposed on such person by reason of the
transactions contemplated by this Agreement.
(n) Taxes. Except as has not had and would not reasonably be expected
to have a Material Adverse Effect:
(i) All tax returns required by applicable Law to have been filed with
any taxing authority by, or on behalf of, the Company or any of its Subsidiaries
have been filed in a timely manner (taking into account any valid extension) in
accordance with all applicable Laws, and all such tax returns are true and
complete in all material respects.
(ii) The Company and each of its Subsidiaries has paid (or has had paid
on its behalf) all taxes due and owing, and the Company's most recent financial
statements included in the Filed Company SEC Documents reflect an adequate
accrual for all taxes payable by Company and its Subsidiaries for all taxable
periods and portions thereof accrued through the date of such financial
statements.
(iii) There are no Liens or encumbrances for taxes on any of the assets
of the Company or any of its Subsidiaries other than for taxes not yet due and
payable.
(iv) The Company and its Subsidiaries have complied with all applicable
Laws relating to the payment and withholding of taxes.
(v) No written notification has been received by the Company or any of
its Subsidiaries that any federal, state, local or foreign audit, examination or
similar proceeding is pending, proposed or asserted with regard to any taxes or
tax returns of the Company or its Subsidiaries.
(vi) There is no currently effective Contract extending, or having the
effect of extending, the period of assessment or collection of any federal,
state and, to the Knowledge of the Company, foreign taxes with respect to the
Company or any of its Subsidiaries nor has any request been made for any such
extension.
(vii) No written notice of a claim of pending investigation has been
received from any state, local or other jurisdiction with which the Company or
any of its Subsidiaries currently does not file tax returns, alleging that the
Company or any of its Subsidiaries has a duty to file tax returns and pay taxes
or is otherwise subject to the taxing authority of such jurisdiction.
(viii) Neither the Company nor any of its Subsidiaries joins or has
joined, for any taxable period during the eight years prior to the date of this
Agreement, in the filing of any affiliated, aggregate, consolidated, combined or
unitary federal, state, local and, to the Knowledge of the Company, foreign tax
return other than consolidated tax returns for the consolidated group of which
the Company is the common parent.
(ix) Neither the Company nor any of its Subsidiaries is a party to or
bound by any tax sharing agreement or tax indemnity agreement, arrangement or
practice (including any advance pricing agreement, closing agreement or other
agreement relating to taxes with any taxing authority).
(x) Neither the Company nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code in the two years prior to the date of this Agreement.
(xi) Neither the Company nor any of its Subsidiaries will be required
to include in a taxable period ending after the Effective Time taxable income
attributable to income that accrued in a prior taxable period (or portion of a
taxable period) but was not recognized for tax purposes in any prior taxable
period as a result of (A) an open transaction disposition made on or before the
Effective Time, (B) a prepaid amount received on or prior to the Effective Time,
(C) the installment method of accounting, (D) the long-term contract method of
accounting, (E) the cash method of accounting or Section 481 of the Code or (F)
any comparable provisions of state or local tax Law, domestic or foreign, or for
any other reason, other than any amounts that are specifically reflected in a
reserve for taxes on the most recent financial statements of the Company
included in the Filed Company SEC Documents.
(xii) Neither the Company nor any of its Subsidiaries has entered into
a "listed transaction" within the meaning of Treasury Regulation ss.
1.6011-4(b)(2)
(xiii) As used in this Agreement (A) "tax" means (i) any tax, duty,
governmental fee or other like assessment or charge of any kind whatsoever
(including withholding on amounts paid to or by any person and liabilities with
respect to unclaimed funds), together with any related interest, penalty,
addition to tax or additional amount, and any liability for any of the foregoing
as transferee, (ii) in the case of the Company or any of its Subsidiaries,
liability for the payment of any amount of the type described in clause (i) as a
result of being or having been before the Effective Time a member of an
affiliated, consolidated, combined or unitary group, or a party to any Contract
as a result of which liability of the Company or any of its Subsidiaries is
determined or taken into account with reference to the activities of any other
person and (iii) in the case of the Company or any of its Subsidiaries,
liability of the Company or any of its Subsidiaries for the payment of any
amount as a result of being party to any tax sharing Contract or with respect to
the payment of any amount imposed on any person of the type described in (i) or
(ii) as a result of any existing Contract (including an indemnification
Contract); (B) "taxing authority" means any Federal, state, local or foreign
government, any subdivision, agency, commission or authority thereof, or any
quasi-governmental body exercising tax regulatory authority; and (C) "tax
return" means any report, return, document, declaration or other information or
filing required to be filed with respect to taxes (whether or not a payment is
required to be made with respect to such filing), including information returns,
any documents with respect to or accompanying payments of estimated taxes, or
with respect to or accompanying requests for the extension of time in which to
file any such report, return, document, declaration or other information.
(o) Title to Properties. Each of the Company and its Subsidiaries has
valid title to, or valid leasehold or sublease interests or other comparable
contract rights in or relating to all of its real properties and other tangible
assets necessary for the conduct of its business as currently conducted, except
as have been disposed of in the ordinary course of business and except for
defects in title, easements, restrictive covenants and similar encumbrances that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries has complied with the terms of all leases or subleases to which it
is a party and under which it is in occupancy, and all leases to which the
Company is a party and under which it is in occupancy are in full force and
effect, except for such failure to comply or be in full force and effect that
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any written notice of any event or occurrence that has
resulted or could result (with or without the giving of notice, the lapse of
time or both) in a default with respect to any lease or sublease to which it is
a party, which defaults individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.
(p) Intellectual Property. (i) Section 3.01(p)(i) of the Company
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list (in all material respects) of all patents and applications therefor,
registered trademarks and applications therefor, domain name registrations and
copyright registrations (if any) that, in each case, are owned by or licensed to
the Company or any of its Subsidiaries and are material to the conduct of the
business of the Company and its Subsidiaries, taken as a whole, as currently
conducted. Such intellectual property rights required to be listed in Section
3.01(p)(i) of the Company Disclosure Schedule, together with any tradename
rights, trade secret or know how rights, service xxxx rights, trademark rights,
patent rights, intellectual property rights in computer programs or software or
other type of intellectual property rights, in each case, that are owned or
licensed by the Company or any of its Subsidiaries and are material to the
conduct of the business of the Company and its Subsidiaries, taken as a whole,
as currently conducted, are collectively referred to herein as "Intellectual
Property Rights". All Intellectual Property Rights are either (x) owned by the
Company or a Subsidiary of the Company free and clear of all Liens or (y)
licensed to the Company or a Subsidiary of the Company free and clear (to the
Knowledge of the Company) of all Liens, except where the failure to so own or
license such Intellectual Property Rights individually or in the aggregate has
not had and would not reasonably be expected to have a Material Adverse Effect.
There are no claims pending or, to the Knowledge of the Company, threatened with
regard to the ownership or, to the Knowledge of the Company, licensing by the
Company or any of its Subsidiaries of any Intellectual Property Rights which
individually or in the aggregate has had or would reasonably be expected to have
a Material Adverse Effect. Each of the Company and its Subsidiaries owns, is
validly licensed or otherwise has the right to use all Intellectual Property
Rights, except where the failure to own, have a valid license or otherwise have
rights to use individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect. The execution and
delivery of this Agreement by the Company do not, and the consummation by the
Company of the Merger and the other transactions contemplated by this Agreement
and compliance by the Company with the provisions of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, cancelation or acceleration of any obligation or to the
loss of a benefit under, or result in the creation of any Lien in or upon, any
Intellectual Property Right, in each case that individually or in the aggregate
has had or would reasonably be expected to have a Material Adverse Effect.
Section 3.01(p)(i) of the Company Disclosure Schedule sets forth, as of the date
hereof, all Contracts under which the Company or any of its Subsidiaries is
obligated to make payments to third parties for use of any Intellectual Property
Rights with respect to the commercialization of any products that are, as of the
date hereof, being sold, manufactured by or under development by the Company or
any of its Subsidiaries and for which such payments are in excess of $2,000,000
per year for any single product. The aggregate amount of all such payments that
the Company and its Subsidiaries are obligated to make under any Contract of the
type described in the immediately preceding sentence that are not required to be
disclosed pursuant to such sentence does not exceed $10,000,000 per year.
(ii) There are no pending or, to the Knowledge of the Company,
threatened claims that the Company or any of its Subsidiaries has infringed or
is infringing (including with respect to the manufacture, use or sale by the
Company or any of its Subsidiaries of any products or to the operations of the
Company and its Subsidiaries) any intellectual property rights of any person
which individually or in the aggregate has had or would reasonably be expected
to have a Material Adverse Effect. To the Knowledge of the Company, as of the
date of this Agreement, there are no facts, circumstances or conditions that
would reasonably be expected to form the basis for any claim by a person to
exclude or prevent the Company or any of its Subsidiaries from freely using its
Intellectual Property Rights and that individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect.
(iii) All patents required to be listed in Section 3.01(p)(i) of the
Company Disclosure Schedule that are owned by the Company or any of its
Subsidiaries have been duly registered and/or filed with or issued by each
appropriate Governmental Entity, all necessary affidavits of continuing use have
been timely filed, and all necessary maintenance fees have been timely paid to
continue all such rights in effect, other than failures to be duly registered,
filed, issued or paid which individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect. None of the
patents required to be listed in Section 3.01(p)(i) of the Company Disclosure
Schedule that are owned by the Company or any of its Subsidiaries has expired or
been declared invalid, in whole or in part, by any Governmental Entity, other
than such expirations or declarations of invalidity which individually or in the
aggregate have not had and would not reasonably be expected to have a Material
Adverse Effect. There are no ongoing interferences, oppositions, reissues,
reexaminations or other proceedings challenging any of the patents or patent
applications required to be listed in Section 3.01(p)(i) of the Company
Disclosure Schedule and owned by the Company or any of its Subsidiaries (or, to
the Company's Knowledge, challenging any such patents or patent applications
licensed to the Company or any of its Subsidiaries), including ex parte and
post-grant proceedings, in the United States Patent and Trademark Office or in
any foreign patent office or similar administrative agency, other than such
interferences, oppositions, reissues, reexaminations or proceedings that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(iv) Except as has not had and would not reasonably be expected to have
a Material Adverse Effect, the Company and its Subsidiaries have used
commercially reasonable efforts to maintain their material trade secrets in
confidence.
(q) Voting Requirements. The affirmative vote of holders of a majority
of the outstanding shares of Company Common Stock at the Shareholders' Meeting
or any adjournment or postponement thereof to approve this Agreement (the
"Shareholder Approval") is the only vote of the holders of any class or series
of capital stock of the Company necessary to approve this Agreement and the
transactions contemplated by this Agreement (it being understood that the
approval of the Original Merger Agreement by the shareholders of the Company on
April 27, 2005, shall not constitute the "Shareholder Approval" with regard to
this Agreement).
(r) State Takeover Laws; Company Articles Provisions. The Board of
Directors of the Company has unanimously adopted, by all directors present, this
Agreement, the terms of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement, and such adoption
represents all the actions necessary to render inapplicable to this Agreement,
the Merger and the other transactions contemplated by this Agreement, the
restrictions (i) on "business combinations" (as defined in Section 23-1-43-5 of
the IBCL) set forth in Section 23-1-43-18 of the IBCL and (ii) on the actions or
transactions set forth in Paragraph 6 of the Company Articles ("Paragraph 6"),
in each case to the extent, if any, such restrictions would otherwise be
applicable to this Agreement, the Merger and the other transactions contemplated
by this Agreement. For purposes of Paragraph 6, the approval of the Board of
Directors of the Company referred to in the immediately preceding sentence
constitutes the approval of the Merger and the other transactions contemplated
by this Agreement by the "Continuing Directors" (as defined in Paragraph 6)
pursuant to clause (c) of Paragraph 6. No other similar provision of the Company
Articles or the Company By-laws or, to the Knowledge of the Company, other state
takeover Law or similar Law applies or purports to apply to this Agreement, the
Merger or the other transactions contemplated by this Agreement.
(s) Brokers and Other Advisors. No broker, investment banker, financial
advisor or other person (other than X.X. Xxxxxx Securities Inc. and Xxxxxx
Xxxxxxx & Co. Incorporated), the fees and expenses of which will be paid by the
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company. The
Company has delivered to Parent complete and accurate copies of all Contracts
under which any such fees or expenses are payable and all indemnification and
other Contracts related to the engagement of the persons to whom such fees are
payable.
(t) Opinion of Financial Advisors. The Company has received the
opinions of each of X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co.
Incorporated, in each case dated as of November 14, 2005, to the effect that, as
of such date, the Merger Consideration is fair, from a financial point of view,
to the holders of shares of Company Common Stock, a signed copy of which opinion
has been, or will promptly be, delivered to Parent.
(u) Regulatory Compliance. (i) As to each product subject to the FDCA
or similar Legal Provisions in any foreign jurisdiction that are developed,
manufactured, tested, distributed and/or marketed by the Company or any of its
Subsidiaries (a "Medical Device"), each such Medical Device is being developed,
manufactured, tested, distributed and/or marketed in compliance with all
applicable requirements under the FDCA and similar Legal Provisions, including
those relating to investigational use, premarket clearance or marketing approval
to market a Medical Device, good manufacturing practices, labeling, advertising,
record keeping, filing of reports and security, and in compliance with the
Advanced Medical Technology Association Code of Ethics on Interactions with
Healthcare Professionals and the American Medical Association's guidelines on
gifts to physicians, except for failures in compliance that individually or in
the aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received any notice or other communication from the Federal Food and Drug
Administration (the "FDA") or any other Governmental Entity (A) contesting the
premarket clearance or approval of, the uses of or the labeling and promotion of
any products of the Company or any of its Subsidiaries or (B) otherwise alleging
any violation applicable to any Medical Device of any Legal Provision, in the
case of (A) and (B), that individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.
(ii) No Medical Device is under consideration by senior management of
the Company or any of its Subsidiaries for, or has been recalled, withdrawn,
suspended, seized or discontinued (other than for commercial or other business
reasons) by, the Company or any of its Subsidiaries in the United States or
outside the United States (whether voluntarily or otherwise), in each case since
January 1, 2002. No proceedings in the United States or outside of the United
States of which the Company has Knowledge (whether completed or pending) seeking
the recall, withdrawal, suspension, seizure or discontinuance of any Medical
Device are pending against the Company or any of its Subsidiaries or any
licensee of any Medical Device which individually or in the aggregate have had
or would reasonably be expected to have a Material Adverse Effect.
(iii) As to each Medical Device of the Company or any of its
Subsidiaries for which a premarket approval application, premarket notification,
investigational device exemption or similar state or foreign regulatory
application has been approved, the Company and its Subsidiaries are in
compliance with 21 U.S.C. xx.xx. 360 and 360e or 21 C.F.R. Parts 812 or 814,
respectively, and all similar Legal Provisions and all terms and conditions of
such licenses or applications, except for any such failure or failures to be in
compliance which individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. In addition, the
Company and its Subsidiaries are in substantial compliance with all applicable
registration and listing requirements set forth in 21 U.S.C. ss. 360 and 21
C.F.R. Part 807 and all similar Legal Provisions, except for any such failures
to be in compliance which individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect.
(iv) No article of any Medical Device manufactured and/or distributed
by the Company or any of its Subsidiaries is (A) adulterated within the meaning
of 21 U.S.C. ss. 351 (or similar Legal Provisions), (B) misbranded within the
meaning of 21 U.S.C. ss. 352 (or similar Legal Provisions) or (C) a product that
is in violation of 21 U.S.C. ss. 360 or ss. 360e (or similar Legal Provisions),
except for failures to be in compliance with the foregoing that individually or
in the aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect.
(v) Neither the Company nor any of its Subsidiaries, nor, to the
Knowledge of the Company, any officer, employee or agent of the Company or any
of its Subsidiaries, has made an untrue statement of a material fact or
fraudulent statement to the FDA or any other Governmental Entity, failed to
disclose a material fact required to be disclosed to the FDA or any other
Governmental Entity, or committed an act, made a statement, or failed to make a
statement that, at the time such disclosure was made, could reasonably be
expected to provide a basis for the FDA or any other Governmental Entity to
invoke its policy respecting "Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191 (September 10,
1991) or any similar policy. Neither the Company nor any of its Subsidiaries,
nor, to the Knowledge of the Company, any officer, employee or agent of the
Company or any of its Subsidiaries, has been convicted of any crime or engaged
in any conduct for which debarment is mandated by 21 U.S.C. ss. 335a(a) or any
similar Legal Provision or authorized by 21 U.S.C. ss. 335a(b) or any similar
Legal Provision. Neither the Company nor any of its Subsidiaries, nor, to the
Knowledge of the Company, any officer, employee or agent of the Company or any
of its Subsidiaries, has been convicted of any crime or engaged in any conduct
for which such person or entity could be excluded from participating in the
federal health care programs under Section 1128 of the Social Security Act of
1935, as amended (the "Social Security Act") or any similar Legal Provision.
(vi) Since January 1, 2002, neither the Company nor any of its
Subsidiaries has received any written notice that the FDA or any other
Governmental Entity has (a) commenced, or threatened to initiate, any action to
withdraw its approval or request the recall of any Medical Device, (b)
commenced, or threatened to initiate, any action to enjoin production of any
Medical Device or (c) commenced, or threatened to initiate, any action to enjoin
the production of any medical device produced at any facility where any Medical
Device is manufactured, tested or packaged, except for any such action that
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect.
(vii) To the Knowledge of the Company, there are no facts,
circumstances or conditions that would reasonably be expected to form the basis
for any investigation, suit, claim, action or proceeding against or affecting
the Company or any of its Subsidiaries relating to or arising under (a) the FDCA
or (b) the Social Security Act or regulations of the Office of the Inspector
General of the Department of Health and Human Services, in each case
individually or in the aggregate that has had or would reasonably be expected to
have a Material Adverse Effect.
(v) Rights Agreement. The Company has taken all actions necessary to
cause the Rights Agreement dated as of December 15, 2004, between the Company
and EquiServe Trust Company, as rights agent (the "Rights Agreement"), to (i)
render the Rights Agreement inapplicable to this Agreement, the Merger and the
other transactions contemplated by this Agreement, (ii) ensure that (x) none of
Parent, Sub or any other Subsidiary of Parent is an Acquiring Person (as defined
in the Rights Agreement) pursuant to the Rights Agreement, (y) a Distribution
Date or a Stock Acquisition Date (as such terms are defined in the Rights
Agreement) does not occur and (z) the rights (the "Company Rights") to purchase
Company Series A Preferred Stock issued under the Rights Agreement do not become
exercisable, in the case of clauses (x), (y) and (z), solely by reason of the
execution of this Agreement or the consummation of the Merger or the other
transactions contemplated by this Agreement and (iii) provide that the
Expiration Date (as defined in the Rights Agreement) shall occur immediately
prior to the Effective Time.
SECTION 3.02. Representations and Warranties of Parent and Sub. Except
as disclosed in the Parent SEC Documents filed by Parent and publicly available
prior to the date of this Agreement ("Filed Parent SEC Documents"), Parent and
Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under the
Laws of the jurisdiction in which it is incorporated and has all requisite
corporate power and authority and possesses all governmental licenses, permits,
authorizations and approvals necessary to enable it to use its corporate or
other name and to own, lease or otherwise hold and operate its properties and
other assets and to carry on its business as now being conducted, except whether
the failure to have such governmental licenses, permits, authorizations and
approvals individually or in the aggregate has not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Each of Parent and Sub is
duly qualified or licensed to do business and is in good standing (with respect
to jurisdictions that recognize that concept) in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification, licensing or good standing necessary, other than in
such jurisdictions where the failure to be so qualified, licensed or in good
standing individually or in the aggregate has not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Parent has made available
to the Company complete and accurate copies of its Restated Certificate of
Incorporation and By-laws, the Articles of Incorporation of Sub (the "Sub
Articles") and the By-laws of Sub, in each case as amended to the date hereof.
(b) Authority; Noncontravention. Each of Parent and Sub has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement by Parent and Sub and the consummation by Parent
and Sub of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Parent and Sub and
no other corporate proceedings on the part of Parent or Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated by this
Agreement. This Agreement and the transactions contemplated by this Agreement do
not require approval of the holders of any shares of capital stock of Parent.
This Agreement has been duly executed and delivered by each of Parent and Sub
and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of Parent and Sub, as
applicable, enforceable against Parent and Sub, as applicable, in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization or similar Laws affecting the rights of creditors
generally and the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding at equity or at law). The execution
and delivery of this Agreement by Parent and Sub do not, and the consummation by
Parent and Sub of the Merger and the other transactions contemplated by this
Agreement and compliance by Parent and Sub with the provisions of this Agreement
will not, conflict with, or result in any violation or breach of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of, or result in, termination, cancelation or acceleration of any
obligation or to the loss of a benefit under, or result in the creation of any
Lien in or upon any of the properties or other assets of Parent or Sub under (x)
the Restated Certificate of Incorporation or By-laws of Parent, the Sub Articles
or the By-laws of Sub, (y) any Contract to which Parent or Sub is a party or any
of their respective properties or other assets is subject or (z) subject to the
governmental filings and other matters referred to in the following sentence,
any Legal Provision applicable to Parent or Sub or their respective properties
or other assets, other than, in the case of clauses (y) and (z), any such
conflicts, violations, breaches, defaults, rights of termination, cancelation or
acceleration, losses or Liens that individually or in the aggregate have not had
and would not reasonably be expected to (1) have a Parent Material Adverse
Effect, (2) impair in any material respect the ability of Parent or Sub to
perform its respective obligations under this Agreement or (3) prevent or
materially impede, interfere with, hinder or delay the consummation of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Parent or
Sub in connection with the execution and delivery of this Agreement by Parent
and Sub or the consummation by Parent and Sub of the Merger or the other
transactions contemplated by this Agreement, except for (1) (A) the filing of a
premerger notification and report form by Parent under the HSR Act and the
termination of the waiting period required thereunder, (B) all required
notifications and filings by Parent under Article 4 of the EC Merger Regulation
and the receipt of a decision under Article 6(1)(b), 8(1) or 8(2) thereunder
declaring the Merger compatible with the EC Common Market and (C) the receipt,
termination or expiration, as applicable, of approvals or waiting periods
required under any other applicable competition, merger control, antitrust or
similar Law, (2) the filing with the SEC of (X) the Form S-4 and (Y) such
reports under the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (3) the filing of
the Articles of Merger with the Secretary of State of the State of Indiana, (4)
any filings with and approvals of the NYSE and (5) such other consents,
approvals, orders, authorizations, actions, registrations, declarations and
filings the failure of which to be obtained or made individually or in the
aggregate has not had and would not reasonably be expected to (x) have a Parent
Material Adverse Effect, (y) impair in any material respect the ability of
Parent or Sub to perform its respective obligations under this Agreement or (z)
prevent or materially impede, interfere with, hinder or delay the consummation
of the transactions contemplated by this Agreement.
(c) Parent SEC Documents. Parent has filed all reports, schedules,
forms, statements and other documents (including exhibits and other information
incorporated therein) with the SEC required to be filed by Parent since January
1, 2003 (such documents, together with any documents filed during such period by
Parent with the SEC on a voluntary basis on Current Reports on Form 8-K, the
"Parent SEC Documents"). As of their respective filing dates, the Parent SEC
Documents complied in all material respects with, to the extent in effect at the
time of filing, the requirements of the Securities Act, the Exchange Act and SOX
applicable to such Parent SEC Documents, and none of the Parent SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Parent SEC
Document has been revised, amended, supplemented or superseded by a later-filed
Parent SEC Document, none of the Parent SEC Documents contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, which individually
or in the aggregate would require an amendment, supplement or corrective filing
to such Parent SEC Documents. Each of the financial statements (including the
related notes) of Parent included in the Parent SEC Documents complied at the
time it was filed as to form in all material respects with the applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto in effect at the time of filing, had been prepared in accordance
with GAAP (except, in the case of unaudited statements, as permitted by the
rules and regulations of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
presented in all material respects the consolidated financial position of Parent
and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Neither Parent nor any of its Subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) which
individually or in the aggregate have had or would reasonably be expected to
have a Parent Material Adverse Effect.
(d) Information Supplied. None of the information supplied or to be
supplied by or on behalf of Parent or Sub specifically for inclusion or
incorporation by reference in (i) the Form S-4 will, at the time the Form S-4 is
filed with the SEC and at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, or (ii) the Proxy Statement will, at the date it is first mailed to
the shareholders of the Company and at the time of the Shareholders' Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by or on behalf of the Company specifically for inclusion
or incorporation by reference in the Form S-4 or the Proxy Statement. The Form
S-4 will comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations thereunder.
(e) Interim Operations of Sub. Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
(f) Capital Resources. As of the Closing, Parent will have funds that
are sufficient to effect the Closing on the terms contemplated hereby.
(g) Brokers. No broker, investment banker, financial advisor or other
person, other than Xxxxxxx, Xxxxx & Co., the fees and expenses of which will be
paid by Parent, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent or Sub.
(h) Capital Structure. The authorized capital stock of Parent consists
of 4,320,000,000 shares of Parent Common Stock and 2,000,000 shares of preferred
stock, without par value, of Parent ("Parent Preferred Stock"). At the close of
business on November 11, 2005, (i) 3,119,842,548 shares of Parent Common Stock
were issued and outstanding, (ii) 145,627,833 shares of Parent Common Stock were
held by Parent in its treasury, (iii) no shares of Parent Preferred Stock had
been designated or issued, (iv) 252,675,833 shares of Parent Common Stock were
subject to outstanding options to purchase shares of Parent Common Stock granted
under Parent's stock incentive plans and (v) 6,890,509 shares of Parent Common
Stock were reserved for issuance upon conversion of the 3% Zero Coupon
Convertible Subordinated Debentures of Alza Corporation, a Delaware corporation
and wholly-owned subsidiary of Parent ("Alza"), and the 5.25% Zero Coupon
Convertible Subordinated Debentures of Alza. Except as set forth above in this
Section 3.02(h), at the close of business on November 11, 2005, there were not
issued, reserved for issuance or outstanding (A) any shares of capital stock or
other voting securities of Parent, (B) any securities of Parent convertible into
or exchangeable or exercisable for shares of capital stock or voting securities
of Parent or (C) any warrants, calls, options or other rights to acquire from
Parent, or any obligation of Parent to issue, any shares of capital stock,
voting securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of Parent. Except as set forth above in
this Section 3.02(h), at the close of business on November 11, 2005, no bonds,
debentures, notes or other indebtedness of Parent having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which the shareholders of Parent may vote are issued or
outstanding. The authorized capital stock of Sub consists of 1,000 shares of
common stock, without par value, of which 1,000 shares are issued and
outstanding, all of which shares are beneficially owned by Parent.
(i) Absence of Changes. Except for liabilities incurred in connection
with this Agreement, since the date of the most recent financial statements
included in the Filed Parent SEC Documents, there has not been any Parent
Material Adverse Change.
(j) Litigation. There is no suit, action or proceeding pending or, to
the Knowledge of Parent, threatened against or affecting Parent or any of its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Parent Material
Adverse Effect, nor is there any Order of any Governmental Entity or arbitrator
outstanding against, or, to the Knowledge of Parent, investigation by any
Governmental Entity involving, Parent or any of its Subsidiaries or any of their
respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Parent Material Adverse Effect.
(k) Intellectual Property Rights. Each of Parent and its Subsidiaries
owns or has the right to use all intellectual property rights which are material
to the conduct of the business of Parent and its Subsidiaries, taken as a whole,
in each case (i) with respect to such intellectual property rights that are
owned by Parent or any of its Subsidiaries, free and clear of all Liens and (ii)
with respect to such intellectual property rights that are licensed by Parent or
any of its Subsidiaries, to the Knowledge of Parent, free and clear of all
Liens, except where the failure to so own or have such right to use such
intellectual property rights individually or in the aggregate has not had and
would not reasonably be expected to have a Parent Material Adverse Effect.
Neither the manufacture, marketing, license, sale or use by Parent or any of its
Subsidiaries of any product violates any license or agreement between Parent or
any of its Subsidiaries and any other person and there is no pending or, to the
Knowledge of Parent, threatened claim or litigation contesting the validity,
ownership or right to use, sell, license or dispose of any such intellectual
property rights relating to any product or asserting that the proposed use,
sale, license or disposition thereof, or the manufacture, use or sale of any
product by Parent or any of its Subsidiaries, conflicts with the rights of any
other person, in each case which, individually or in the aggregate, has had or
would reasonably be expected to have a Parent Material Adverse Effect.
(l) Regulatory Compliance. To the Knowledge of Parent, the testing,
manufacture, storage, distribution, use, promotion and sale of products of
Parent or any of its Subsidiaries by Parent, such Subsidiary and their
respective contractors have been performed and is performed in compliance with
all applicable requirements under the FDCA and similar Legal Provisions,
including those relating to investigational use, premarket clearance, good
manufacturing practices, labeling, advertising, record keeping, filing of
reports and security, except for such instances of noncompliance or possible
noncompliance that individually or in the aggregate have not had and would not
reasonably be expected to have a Parent Material Adverse Effect. Neither Parent
nor any of its Subsidiaries has received any adverse written notice within the
past two years that the FDA or any other similar foreign Governmental Entity has
commenced, or threatened to initiate, any action to withdraw its approval or
request the recall of any product of Parent or any of its Subsidiaries, or
commenced, or overtly threatened to initiate, any action to enjoin production of
any such product, except where such action has not had and would not reasonably
be expected to have a Parent Material Adverse Effect.
ARTICLE IV
Covenants Relating to Conduct of Business; No Solicitation
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time, except as set forth in Section 4.01(a) of the Company Disclosure Schedule
or as consented to in writing in advance by Parent or as otherwise permitted or
required by this Agreement, the Company shall, and shall cause each of its
Subsidiaries to, carry on its business in the ordinary course consistent with
past practice prior to the Closing and, to the extent consistent therewith, use
all commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers, employees
and consultants and preserve its relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with it.
In addition to and without limiting the generality of the foregoing, during the
period from the date of this Agreement to the Effective Time, except as
otherwise set forth in Section 4.01(a) of the Company Disclosure Schedule or as
otherwise permitted or required pursuant to this Agreement, the Company shall
not, and shall not permit any of its Subsidiaries to, without Parent's prior
written consent:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect of, any of its
capital stock, other than (1) cash dividends payable by the Company in respect
of shares of Company Common Stock consistent with past practice and not
exceeding $0.10 per share of Company Common Stock per fiscal quarter, (2)
dividends and distributions in connection with the Rights Agreement and (3)
dividends or distributions by a direct or indirect wholly owned Subsidiary of
the Company to its shareholders, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock or (z)
purchase, redeem or otherwise acquire any shares of its capital stock or any
other securities thereof or any rights, warrants or options to acquire any such
shares or other securities, except for purchases, redemptions or other
acquisitions of capital stock or other securities (1) required by the terms of
the Company Stock Plans or the ESPP or (2) required by the terms of any plans,
arrangements or Contracts existing on the date hereof between the Company or any
of its Subsidiaries and any director or employee of the Company or any of its
Subsidiaries (to the extent complete and accurate copies of which have been
heretofore delivered to Parent);
(ii) issue, deliver, sell, grant, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities, or any
"phantom" stock, "phantom" stock rights, stock appreciation rights or stock
based performance units, including pursuant to Contracts as in effect on the
date hereof (other than (x) the issuance of shares of Company Common Stock upon
the exercise of Company Stock Options or in connection with Company Stock Based
Awards, in each case in accordance with their terms on the date hereof, and (y)
the issuance of Company Rights and shares of the Company's capital stock
pursuant to the Company Rights or the Rights Agreement);
(iii) amend (x) the Company Articles or the Company By-laws or other
comparable charter or organizational documents of any of the Company's
Subsidiaries or (y) the Indenture dated as of January 18, 1996 between the
Company and Citibank, N.A., with respect to the 6.15% Senior Unsecured Notes due
February 15, 2006 of the Company (the "Company Notes"), in each case except as
may be required by applicable Law or the rules and regulations of the SEC or the
NYSE;
(iv) directly or indirectly acquire (x) by merging or consolidating
with, by purchasing a substantial portion of the assets of, by making an
investment in or capital contribution to, or by any other manner, any person or
division, business or equity interest of any person or (y) any asset or assets,
except for (1) capital expenditures, which shall be subject to the limitations
of clause (vii) below, (2) purchases of components, raw materials or supplies in
the ordinary course of business consistent with past practice and (3)
acquisitions of material intellectual property rights in respect of
cross-licenses permitted in connection with the discharge, settlement or
satisfaction of claims and litigation under clause (viii) below;
(v) (x) sell, lease, license, mortgage, sell and leaseback or otherwise
encumber or subject to any Lien or otherwise dispose of any of its material
properties or other material assets or any interests therein (including
securitizations), except for (1) sales of inventory and used equipment in the
ordinary course of business consistent with past practice and (2) licenses of
Intellectual Property Rights permitted in connection with the discharge,
settlement or satisfaction of claims and litigation under clause (viii) below,
or (y) enter into, modify or amend any lease of material property, except for
modifications or amendments that are not materially adverse to the Company and
its Subsidiaries, taken as a whole;
(vi) (x) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or calls,
options, warrants or other rights to acquire any debt securities of the Company
or any of its Subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other Contract to maintain any financial statement
condition of another person or enter into any arrangement having the economic
effect of any of the foregoing (other than short-term borrowings in the ordinary
course of business consistent with past practice under the Company's commercial
paper program, in an aggregate amount not to exceed $800,000,000 at any time
outstanding) or (y) make any loans or advances to any other person, other than
to employees in respect of travel expenses in the ordinary course of business
consistent with past practice, which would result in the aggregate principal
amount of all of the outstanding foregoing loans and advances of the Company and
its Subsidiaries exceeding $25,000,000;
(vii) make any new capital expenditure or expenditures exceeding the
amounts set forth in Section 4.01(a)(vii) of the Company Disclosure Schedule;
(viii) except as required by Law or any judgment by a court of
competent jurisdiction, (v) pay, discharge, settle or satisfy any material
claims, liabilities, obligations or litigation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction in the ordinary course of business consistent with
past practice or in accordance with their terms, of liabilities disclosed,
reflected or reserved against in the most recent audited financial statements
(or the notes thereto) of the Company included in the Filed Company SEC
Documents (for amounts not in excess of such reserves) or incurred since the
date of such financial statements in the ordinary course of business consistent
with past practice, (w) cancel any material indebtedness, (x) waive or assign
any claims or rights of material value, (y) waive any benefits of, or agree to
modify in any respect, or, subject to the terms hereof, knowingly fail to
enforce, or consent to any matter with respect to which consent is required
under, any standstill or similar Contract to which the Company or any of its
Subsidiaries is a party or (z) waive any material benefits of, or agree to
modify in any material respect, or, subject to the terms hereof, knowingly fail
to enforce in any material respect, or consent to any matter with respect to
which consent is required under, any material confidentiality or similar
Contract to which the Company or any of its Subsidiaries is a party;
(ix) enter into (1) any material Contract that would be of a type
referred to in Section 3.01(i)(2)(A) or (2) any other material Contract that
would be of a type referred to in Section 3.01(i)(2)(B) or (C) and, in the case
of this clause (2), that (A) would reasonably be expected to impair in any
material respect the ability of the Company and its Subsidiaries to conduct
their business as currently conducted or (B) would reasonably be expected to
have a material adverse effect on the reasonably expected benefits of the Merger
to Parent;
(x) enter into, modify, amend or terminate any Contract or waive,
release or assign any material rights or claims thereunder, which if so entered
into, modified, amended, terminated, waived, released or assigned would
reasonably be expected to (A) have a Material Adverse Effect, (B) impair in any
material respect the ability of the Company to perform its obligations under
this Agreement or (C) prevent or materially impede, interfere with, hinder or
delay the consummation of the transactions contemplated by this Agreement;
(xi) enter into any material Contract to the extent consummation of the
transactions contemplated by this Agreement or compliance by the Company with
the provisions of this Agreement could reasonably be expected to conflict with,
or result in a violation or breach of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of, or result in,
termination, cancelation or acceleration of any obligation or to the loss of a
benefit under, or result in the creation of any Lien in or upon any of the
properties or other assets of the Company or any of its Subsidiaries under, or
require Parent to license or transfer any of its Intellectual Property Rights or
other material assets under, or give rise to any increased, additional,
accelerated, or guaranteed right or entitlements of any third party under, or
result in any material alteration of, any provision of such Contract;
(xii) except as required to ensure that any Company Benefit Plan or
Company Benefit Agreement is not then out of compliance with applicable Law or
to comply with any Company Benefit Plan, Company Benefit Agreement or other
Contract entered into prior to the date hereof (to the extent complete and
accurate copies of which have been heretofore delivered to Parent), (A) adopt,
enter into, terminate or amend (I) any collective bargaining Contract or Company
Benefit Plan or (II) any Company Benefit Agreement or other Contract, plan or
policy involving the Company or any of its Subsidiaries and Key Personnel, (B)
increase in any manner the compensation, bonus or fringe or other benefits of,
or pay any discretionary bonus of any kind or amount whatsoever to, any current
or former director, officer, employee or consultant, except in the ordinary
course of business consistent with past practice to employees of the Company or
its Subsidiaries other than Key Personnel, (C) grant or pay any severance or
termination pay, except for severance or termination pay granted or paid in the
ordinary course of business consistent with past practice, to, or increase in
any material manner the severance or termination pay of, any current or former
director, officer, employee or consultant of the Company or any of its
Subsidiaries other than Key Personnel, (D) remove any existing restrictions in
any Company Benefit Agreements, Company Benefit Plans or awards made thereunder,
(E) take any action to fund or in any other way secure the payment of
compensation or benefits under any Company Benefit Plan or Company Benefit
Agreement, (F) take any action to accelerate the vesting or payment of any
compensation or benefit under any Company Benefit Plan or Company Benefit
Agreement or awards made thereunder or (G) materially change any actuarial or
other assumption used to calculate funding obligations with respect to any
Company Pension Plan or change the manner in which contributions to any Company
Pension Plan are made or the basis on which such contributions are determined;
(xiii) except as required by GAAP, revalue any material assets of the
Company or any of its Subsidiaries or make any change in accounting methods,
principles or practices; or
(xiv) authorize any of, or commit, resolve, propose or agree to take
any of, the foregoing actions.
(b) Other Actions. The Company, Parent and Sub shall not, and shall not
permit any of their respective Subsidiaries to, take any action that could
reasonably be expected to result in any of the conditions to the Merger set
forth in Article VI not being satisfied.
(c) Advice of Changes; Filings. The Company and Parent shall promptly
advise the other party orally and in writing if (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) contained in this
Agreement becomes untrue or inaccurate in a manner that would result in the
failure of the condition set forth in Section 6.02(a) or Section 6.03(a) or (ii)
it (and, in the case of Parent, Sub) fails to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it (and, in the case of Parent, Sub) under this Agreement;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Agreement. The Company and Parent shall, to the extent permitted by Law,
promptly provide the other with copies of all filings made by such party with
any Governmental Entity in connection with this Agreement and the transactions
contemplated by this Agreement, other than the portions of such filings that
include confidential or proprietary information not directly related to the
transactions contemplated by this Agreement.
(d) Certain Tax Matters. (i) During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its
Subsidiaries to (A) timely file all material tax returns (taking into account
any applicable extensions) required to be filed by or on behalf of each such
entity ("Post-Signing Returns"); (B) timely pay all material taxes due and
payable; (C) accrue a reserve in the books and records and financial statements
of any such entity in accordance with past practice for all taxes payable but
not yet due; (D) promptly notify Parent of any material suit, claim, action,
investigation, audit or similar proceeding (collectively, "Actions") pending
against or with respect to the Company or any of its Subsidiaries in respect of
any amount of tax and not settle or compromise any tax liability in excess of
$10 million for individual claims, or $50 million in the aggregate, without
Parent's prior written consent, which shall not be unreasonably withheld; (E)
not make any material tax election, other than with Parent's prior written
consent or other than in the ordinary course of business consistent with past
practice; and (F) cause all existing tax sharing agreements, tax indemnity
agreements and similar agreements, arrangements or practices to which the
Company or any of its Subsidiaries is or may be a party or by which the Company
or any of its Subsidiaries is or may otherwise be bound to be terminated as of
the Closing Date so that after such date neither the Company nor any of its
Subsidiaries shall have any further rights or liabilities thereunder. Any tax
returns described in this Section 4.01(d) shall be complete and correct in all
material respects and shall be prepared on a basis consistent with the past
practice of the Company and in a manner that does not distort taxable income,
including by deferring income or accelerating deductions. The Company shall
notify Parent upon the filing of any such material tax return and shall make
such tax returns available to Parent.
(ii) Notwithstanding any other provision of this Agreement, the Company
shall not permit any of its Subsidiaries incorporated outside the United States
(a "Non-U.S. Subsidiary") to make a cash distribution to the Company or any of
the Company's Subsidiaries incorporated in the United States in excess of
amounts described in Section 965(b)(2)(B) of the Code (an "Excess Distribution")
except to the extent the Company has provided Parent with substantiation, in a
form reasonably satisfactory to Parent, that the deduction described in Section
965(a) of the Code will apply to the entire amount of the Excess Distribution.
For purposes of this Section, a written opinion of a nationally recognized law
firm to the effect that the deduction described in Section 965(a) of the Code
should apply to the entire amount of the Excess Distribution shall be a form of
substantiation deemed reasonably satisfactory to Parent. Furthermore,
notwithstanding any other provision of this Agreement, the Company shall not
permit any of its Non-U.S. Subsidiaries to increase its indebtedness to any
related person as described in Section 965(b)(3) of the Code without the prior
written consent of Parent, such consent not to be unreasonably withheld. For
purposes of the preceding sentence, indebtedness of a Non-U.S. Subsidiary to a
related person shall include indebtedness of a Non-U.S. Subsidiary guaranteed by
a related person.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor shall it
authorize or permit any of its Subsidiaries or any of their respective
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other advisor, agent or representative (collectively,
"Representatives") retained by it or any of its Subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or knowingly encourage,
or take any other action designed to, or which could reasonably be expected to,
facilitate, any Takeover Proposal or (ii) enter into, continue or otherwise
participate in any discussions or negotiations regarding, or furnish to any
person any information, or otherwise cooperate in any way with, any Takeover
Proposal. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in the preceding sentence by any Representative of the
Company or any of its Subsidiaries shall be a breach of this Section 4.02(a) by
the Company. The Company shall, and shall cause its Subsidiaries to, immediately
cease and cause to be terminated all existing discussions or negotiations with
any person conducted heretofore with respect to any Takeover Proposal and
request the prompt return or destruction of all confidential information
previously furnished. Notwithstanding the foregoing, at any time prior to
obtaining the Shareholder Approval, in response to a bona fide written Takeover
Proposal that the Board of Directors of the Company reasonably determines (after
consultation with outside counsel and a financial advisor of nationally
recognized reputation) constitutes or is reasonably likely to lead to a Superior
Proposal, and which Takeover Proposal was not solicited after the date hereof
and was made after the date hereof and did not otherwise result from a breach of
this Section 4.02(a), the Company may, subject to compliance with Section
4.02(c), (x) furnish information with respect to the Company and its
Subsidiaries to the person making such Takeover Proposal (and its
Representatives) pursuant to a customary confidentiality agreement not less
restrictive to such person than the confidentiality provisions of the
Confidentiality Agreement, provided that all such information has previously
been provided to Parent or is provided to Parent prior to or substantially
concurrent with the time it is provided to such person, and (y) participate in
discussions or negotiations with the person making such Takeover Proposal (and
its Representatives) regarding such Takeover Proposal.
The term "Takeover Proposal" means any inquiry, proposal or offer from
any person relating to, or that could reasonably be expected to lead to, any
direct or indirect acquisition or purchase, in one transaction or a series of
transactions, of assets (including equity securities of any Subsidiary of the
Company) or businesses that constitute 15% or more of the revenues, net income
or assets of the Company and its Subsidiaries, taken as a whole, or 15% 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 15% or
more of any class of equity securities of the Company, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution,
joint venture, binding share exchange or similar transaction involving the
Company or any of its Subsidiaries pursuant to which any person or the
shareholders of any person would own 15% or more of any class of equity
securities of the Company or of any resulting parent company of the Company, in
each case other than the transactions contemplated by this Agreement.
The term "Superior Proposal" means any bona fide offer made by a third
party that if consummated would result in such person (or its shareholders)
owning, directly or indirectly, more than 80% of the shares of Company Common
Stock then outstanding (or of the shares of the surviving entity in a merger or
the direct or indirect parent of the surviving entity in a merger) or all or
substantially all the assets of the Company, which the Board of Directors of the
Company reasonably determines (after consultation with a financial advisor of
nationally recognized reputation) to be (i) more favorable to the shareholders
of the Company from a financial point of view than the Merger (taking into
account all the terms and conditions of such proposal and this Agreement
(including any changes to the financial terms of this Agreement proposed by
Parent in response to such offer or otherwise)) and (ii) reasonably capable of
being completed, taking into account all financial, legal, regulatory and other
aspects of such proposal.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) (A) withdraw (or modify in a manner adverse to Parent), or
publicly propose to withdraw (or modify in a manner adverse to Parent), the
adoption or recommendation by such Board of Directors or any such committee
thereof of this Agreement, the Merger or the other transactions contemplated by
this Agreement or (B) adopt or recommend, or propose publicly to adopt or
recommend, any Takeover Proposal (any action described in this clause (i) being
referred to as a "Company Adverse Recommendation Change") or (ii) adopt or
recommend, or publicly propose to adopt or recommend, or allow the Company or
any of its Subsidiaries to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement, partnership
agreement or other similar Contract constituting or related to, or that is
intended to or could reasonably be expected to lead to, any Takeover Proposal
(other than a confidentiality agreement referred to in Section 4.02(a)) (an
"Acquisition Agreement"). Notwithstanding the foregoing, at any time prior to
obtaining the Shareholder Approval and subject to Section 4.02(c), the Board of
Directors of the Company may (x) make a Company Adverse Recommendation Change if
the Board of Directors of the Company determines in good faith (after
consultation with outside counsel and a financial advisor of nationally
recognized reputation) that (A) a Parent Material Adverse Effect has occurred
and (B) as a result thereof such action is consistent with their fiduciary
duties under applicable Laws or (y) in response to a Takeover Proposal that the
Board reasonably determines (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) constitutes a Superior
Proposal and that was unsolicited and made after the date hereof and that did
not otherwise result from a breach of this Section 4.02, (1) make a Company
Adverse Recommendation Change or (2) cause the Company to terminate this
Agreement and concurrently with or after such termination enter into an
Acquisition Agreement; provided, however, that the Company shall not be entitled
to exercise its right to make a Company Adverse Recommendation Change or
terminate this Agreement pursuant to clause (y) until after the fifth business
day following Parent's receipt of written notice (a "Notice of Superior
Proposal") from the Company advising Parent that the Board of Directors of the
Company intends to take such action and specifying the reasons therefor,
including the terms and conditions of any Superior Proposal that is the basis of
the proposed action by the Board of Directors (it being understood and agreed
that any amendment to the financial terms or any other material term of such
Superior Proposal shall require a new Notice of Superior Proposal and a new five
business day period). In determining whether to make a Company Adverse
Recommendation Change or to cause the Company to so terminate this Agreement,
the Board of Directors of the Company shall take into account any changes to the
financial terms of this Agreement proposed by Parent in response to a Notice of
Superior Proposal or otherwise.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall promptly advise
Parent orally and in writing (i) of any Takeover Proposal, the material terms
and conditions of any such Takeover Proposal (including any changes thereto) and
the identity of the person making any such Takeover Proposal and (ii) if the
Board of Directors of the Company is considering, or has decided to consider,
whether any change, effect, event, occurrence, state of facts or development
constitutes a Parent Material Adverse Effect. The Company shall (x) keep Parent
fully informed in all material respects of the status and details (including any
change to the terms thereof) of any Takeover Proposal, (y) provide to Parent as
soon as practicable after receipt or delivery thereof copies of all
correspondence and other written material sent or provided to the Company or any
of its Subsidiaries from any person that describes any of the terms or
conditions of any Takeover Proposal and (z) keep Parent fully informed in all
material respects of the status and details of any determination by the
Company's Board of Directors with respect to a potential Parent Material Adverse
Effect.
(d) Nothing contained in this Section 4.02 shall prohibit the Company
from (x) taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) under the Exchange Act or making a statement required under Rule
14a-9 under the Exchange Act or (y) making any disclosure to the shareholders of
the Company that is required by applicable Law; provided, however, that in no
event shall the Company or its Board of Directors or any committee thereof take,
or agree or resolve to take, any action prohibited by Section 4.02(b) (it being
understood that any accurate disclosure of factual information to the
shareholders of the Company that is required to be made to such shareholders
under applicable federal securities Laws shall not be considered a modification
prohibited by clause (i)(A) of Section 4.02(b)).
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Form S-4 and the Proxy Statement;
Shareholders' Meeting. (a) As promptly as practicable following November 14,
2005, the Company and Parent shall prepare and Parent shall file with the SEC a
post-effective amendment to the Registration Statement on Form S-4 of Parent
(Registration No. 333-122856), originally filed with the SEC on February 16,
2005, in connection with the issuance of shares of Parent Common Stock in the
Merger (as may be further amended or supplemented from time to time, the "Form
S-4"), in which the Proxy Statement will be included as a prospectus. Each of
the Company and Parent shall use its reasonable best efforts to have the Form
S-4 declared effective under the Securities Act as promptly as practicable after
such filing. The Company shall use its reasonable best efforts to cause the
Proxy Statement to be mailed to the shareholders of the Company as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
Parent shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a general consent to
service of process) required to be taken under any applicable state securities
Laws in connection with the issuance of shares of Parent Common Stock in the
Merger, and each of Parent and the Company shall furnish all information as may
be reasonably requested by the other in connection with any such action and the
preparation, filing and distribution of the Form S-4 and the Proxy Statement. No
filing of, or amendment or supplement to, the Form S-4 will be made by Parent,
and no filing of, or amendment or supplement to, the Proxy Statement will made
by the Company, in each case without providing the other party a reasonable
opportunity to review and comment thereon. If at any time prior to the Effective
Time any information relating to the Company or Parent, or any of their
respective Affiliates, directors or officers, should be discovered by the
Company or Parent which should be set forth in an amendment or supplement to
either the Form S-4 or the Proxy Statement, so that either such document would
not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by Law, disseminated to the shareholders of
the Company. The parties shall notify each other promptly of the time when the
Form S-4 has become effective, of the issuance of any stop order or suspension
of the qualification of the Parent Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or of the receipt of any
comments from the SEC or the staff of the SEC and of any request by the SEC or
the staff of the SEC for amendments or supplements to the Proxy Statement or the
Form S-4 or for additional information and shall supply each other with copies
of (i) all correspondence between it or any of its Representatives, on the one
hand, and the SEC or the staff of the SEC, on the other hand, with respect to
the Proxy Statement, the Form S-4 or the Merger and (ii) all orders of the SEC
relating to the Form S-4.
(b) The Company shall use its reasonable best efforts to, as promptly
as practicable, establish a record date for, duly call, give notice of, convene
and hold a meeting of its shareholders (the "Shareholders' Meeting") solely for
the purpose of obtaining the Shareholder Approval. Subject to Section 4.02, the
Company shall, through its Board of Directors, recommend to its shareholders
approval of this Agreement and shall include such recommendation in the Proxy
Statement. Without limiting the generality of the foregoing, but subject to the
terms of this Agreement, the Company's obligations pursuant to the first
sentence of this Section 5.01(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
Takeover Proposal.
SECTION 5.02. Access to Information; Confidentiality.
(a) To the extent permitted by applicable Law, the Company shall afford
to Parent, and to Parent's officers, employees, accountants, counsel, financial
advisors and other Representatives, reasonable access (including for the purpose
of coordinating integration activities and transition planning with the
employees of the Company and its Subsidiaries) during normal business hours and
upon reasonable prior notice to the Company during the period prior to the
Effective Time or the termination of this Agreement to all its and its
Subsidiaries' properties, books, Contracts, commitments, personnel and records,
but only to the extent that such access does not unreasonably interfere with the
business or operations of the Company and its Subsidiaries, and, during such
period, the Company shall furnish promptly to Parent (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities Laws and (b)
all other information concerning its and its Subsidiaries' business, properties
and personnel as Parent may reasonably request; provided, however, that the
Company shall not be required to (or to cause any of its Subsidiaries to) so
confer, afford such access or furnish such copies or other information to the
extent that doing so would result in the loss of attorney-client privilege
(provided that the Company shall use its reasonable best efforts to allow for
such access or disclosure in a manner that does not result in a loss of
attorney-client privilege). Except for disclosures expressly permitted by the
terms of the Confidentiality Agreement dated as of August 4, 2004, between
Parent and the Company (as it may be amended from time to time, the
"Confidentiality Agreement"), Parent shall hold, and shall cause its officers,
employees, accountants, counsel, financial advisors and other Representatives to
hold, all information received from the Company, directly or indirectly, in
confidence in accordance with the Confidentiality Agreement. The Confidentiality
Agreement shall survive any termination of this Agreement. Notwithstanding the
terms of the Confidentiality Agreement, Parent and the Company agree that until
the earlier of the consummation of this Agreement or the six month anniversary
of the date of the termination of this Agreement, as applicable, each party and
its respective Subsidiaries shall not, without the other party's prior written
consent, directly or indirectly solicit for employment (other than through
advertising in newspapers or periodicals of general circulation or recruiters'
searches, in each case not specifically directed at the other party's employees)
any person currently employed by the other party or any of its Subsidiaries with
whom it has contact or who is identified to such party in connection with the
transactions contemplated by this Agreement. No investigation pursuant to this
Section 5.02 or information provided or received by any party hereto pursuant to
this Agreement will affect any of the representations or warranties of the
parties hereto contained in this Agreement or the conditions hereunder to the
obligations of the parties hereto.
(b) To the extent permitted by applicable Law, Parent shall afford to
the Company and its Representatives reasonable access to Parent's personnel and
records (i) on a basis consistent with the Company's access to such personnel
and records prior to the date hereof in connection with the Company's due
diligence review of Parent and its Subsidiaries in connection with the
transactions contemplated hereby and (ii) to the extent reasonably necessary for
the Company to determine whether the conditions set forth in Section 6.03 are
satisfied.
SECTION 5.03. Reasonable Best Efforts. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using reasonable best efforts to
accomplish the following: (i) the taking of all acts necessary to cause the
conditions to Closing to be satisfied as promptly as practicable, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities) and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (iii) the
avoidance of each and every impediment under any antitrust, merger control,
competition or trade regulation Law that may be asserted by any Governmental
Entity with respect to the Merger so as to enable the Closing to occur as soon
as reasonably possible and (iv) the obtaining of all necessary consents,
approvals or waivers from third parties, including any such consents, approvals
or waivers required in connection with any Divestiture. In connection with and
without limiting the foregoing, the Company and Parent shall (A) duly file with
the U.S. Federal Trade Commission and the Antitrust Division of the Department
of Justice the notification and report form (the "HSR Filing") required under
the HSR Act and (B) duly make all notifications and other filings required (i)
under the EC Merger Regulation (together with the HSR Filings, the "Antitrust
Filings") or (ii) under any other applicable competition, merger control,
antitrust or similar Law that the Company and Parent deem advisable or
appropriate, in each case with respect to the transactions contemplated by this
Agreement and as promptly as practicable. The Antitrust Filings shall be in
substantial compliance with the requirements of the HSR Act, the EC Merger
Regulation or other Laws, as applicable. Each party shall cooperate with the
other party to the extent necessary to assist the other party in the preparation
of its Antitrust Filings and, if requested, to promptly amend or furnish
additional information thereunder. Each party shall use its reasonable best
efforts to furnish to each other all information required for any filing, form,
declaration, notification, registration and notice, other than confidential or
proprietary information not directly related to the transactions contemplated by
this Agreement, and to keep the other party reasonably informed with respect to
the status of each clearance, approval or waiver sought from a Governmental
Entity in connection with the transactions contemplated by this Agreement and
the material communications between such party and such Governmental Entity.
Each party shall consult with the other party, and consider in good faith the
views of the other party, prior to entering into any agreement with any
Antitrust Authority. Neither party shall, nor shall it permit any of its
Subsidiaries to, acquire or agree to acquire any business, person or division
thereof, or otherwise acquire or agree to acquire any assets if the entering
into of a definitive agreement relating to or the consummation of such
acquisition, could reasonably be expected to materially increase the risk of not
obtaining the applicable clearance, approval or waiver from an Antitrust
Authority with respect to the transactions contemplated by this Agreement. The
Company and its Board of Directors shall (1) use reasonable best efforts to
ensure that no state takeover Law or similar Law is or becomes applicable to
this Agreement, the Merger or any of the other transactions contemplated by this
Agreement and (2) if any state takeover Law or similar Law becomes applicable to
this Agreement, the Merger or any of the other transactions contemplated by this
Agreement, use reasonable best efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such Law on this Agreement, the Merger and the other
transactions contemplated by this Agreement. Notwithstanding the foregoing or
any other provision of this Agreement: (a) with respect to the assets of the
cardiac rhythm management businesses of Parent, the Company and their respective
Affiliates, Parent and its Affiliates shall only be required to agree to
Divestitures of such assets that individually or in the aggregate would not
reasonably be expected to have greater than a de minimis adverse effect on the
combined cardiac rhythm management business of Parent, the Company and their
respective Affiliates, taken as a whole; (b) with respect to the assets of the
coronary vascular intervention business of Parent and its Affiliates, Parent and
its Affiliates shall only be required to agree to Divestitures of such assets
that individually or in the aggregate would not reasonably be expected to have
greater than a de minimis adverse effect on the drug eluting stent business of
Parent and its Affiliates, taken as a whole; (c) with respect to the assets of
the vascular intervention business of the Company and its Affiliates, Parent and
its Affiliates shall only be required to agree to Divestitures of such assets
that individually or in the aggregate would not reasonably be expected to have a
material adverse effect on the combined vascular intervention business of
Parent, the Company and their respective Affiliates, taken as a whole; (d) none
of Parent and its Affiliates shall be required to agree to any Divestiture of
any of their assets except as provided in clauses (a) and (b) above and (e) if,
but only if, directed by Parent, the Company shall agree to any Divestiture of
any of its assets or the assets of any of its Affiliates if such Divestiture is
conditioned on the consummation of the Merger. For purposes of this Agreement, a
"Divestiture" of any asset shall mean (i) any sale, transfer, license, separate
holding, divestiture or other disposition, or any prohibition of, or any
limitation on, the acquisition, ownership, operation, effective control or
exercise of full rights of ownership, of such asset or (ii) the termination or
amendment of any existing relationships and contractual rights. It is agreed and
understood that, for purposes of this Agreement, a Divestiture of a business
unit, product line or development program may include (x) the transfer of any
and all assets primarily relating to that business unit or to the research,
development, manufacture, marketing or sale of that product line or development
program and (y) licensing or otherwise making available assets that are related,
but not primarily, to that business unit, product line or development program;
provided that Parent, the Company or their Affiliates will be entitled to a
license back or otherwise having made available transferred assets to the extent
that such assets otherwise relate to other retained businesses, product lines or
development programs of Parent, the Company or any of their respective
Affiliates. It is understood and agreed by the parties that, for purposes of
this Agreement, the effect of any Divestiture required to be made pursuant to
this Section 5.03 shall not, directly or indirectly, be deemed to result in a
breach of the representations and warranties set forth herein.
SECTION 5.04. Company Stock Options; ESPP. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company (or,
if appropriate, any committee thereof administering the Company Stock Plans)
shall adopt such resolutions or take such other actions as may be required to
effect the following:
(i) each Company Stock Option outstanding immediately prior to the
Effective Time shall be amended and converted into an option to acquire, on the
same terms and conditions as were applicable under such Company Stock Option,
the number of shares of Parent Common Stock (rounded down to the nearest whole
share) equal to the sum of (x) the product of (A) the number of shares of
Company Common Stock subject to such Company Stock Option and (B) the Exchange
Ratio and (y) the product of (A) the number of shares of Company Common Stock
subject to such Company Stock Option and (B) the Cash Portion Option Exchange
Multiple, at an exercise price per share of Parent Common Stock (rounded up to
the nearest whole cent) equal to the quotient obtained by dividing (1) the
aggregate exercise price for the shares of Company Common Stock subject to such
Company Stock Option by (2) the aggregate number of shares of Parent Common
Stock to be subject to such Company Stock Option after giving effect to the
adjustments in this clause (i) (each, as so adjusted, an "Adjusted Option"); and
(ii) make such other changes to the Company Stock Plans as Parent and
the Company may agree are appropriate to give effect to the Merger.
(b) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee of the
Board of Directors of the Company administering the ESPP), shall adopt such
resolutions or take such other actions as may be required to provide that with
respect to the ESPP (i) participants may not increase their payroll deductions
or purchase elections from those in effect on the date of this Agreement, (ii)
each participant's outstanding right to purchase shares of Company Common Stock
under the ESPP shall terminate on the day immediately prior to the day on which
the Effective Time occurs, provided that all amounts allocated to each
participant's account under the ESPP as of such date shall thereupon be used to
purchase from the Company whole shares of Company Common Stock at the applicable
price determined under the terms of the ESPP for the then outstanding offering
periods using such date as the final purchase date for each such offering
period, and (iii) the ESPP shall terminate immediately following such purchases
of Company Common Stock.
(c) The Company shall ensure that following the Effective Time, no
holder of a Company Stock Option (or former holder of a Company Stock Option) or
any participant in any Company Stock Plan, Company Benefit Plan or Company
Benefit Agreement shall have any right thereunder to acquire any capital stock
of the Company or the Surviving Corporation or any other equity interest therein
(including "phantom" stock or stock appreciation rights).
(d) The adjustments provided in Section 5.04(a) with respect to any
Company Stock Option to which Section 421(a) of the Code applies shall be and
are intended to be effected in a manner which is consistent with Section 424(a)
of the Code. As soon as practicable following the Effective Time, Parent shall
deliver to the holders of Adjusted Options appropriate notices setting forth
such holders' rights pursuant to the respective Company Stock Plans and the
Contracts evidencing the grants of such Adjusted Options, which shall provide,
among other things, that such Adjusted Options and Contracts have been assumed
by Parent and shall continue in effect on the same terms and conditions (subject
to the adjustments required by this Section 5.04 after giving effect to the
Merger).
(e) Except as otherwise contemplated by this Section 5.04 and except to
the extent required under the respective terms of the Adjusted Options, all
restrictions or limitations on transfer and vesting with respect to Adjusted
Options, to the extent that such restrictions or limitations shall not have
already lapsed, and all other terms thereof, shall remain in full force and
effect with respect to such Adjusted Options after giving effect to the Merger
and the assumption by Parent as set forth above.
(f) As soon as practicable following the Effective Time, Parent shall
prepare and file with the SEC a registration statement on Form S-8 (or another
appropriate form) registering shares of Parent Common Stock subject to issuance
upon the exercise of the Adjusted Options. The Company shall cooperate with, and
assist Parent in the preparation of, such registration statement. Parent shall
keep such registration statement effective (and to maintain the current status
of the prospectus required thereby) for so long as any Adjusted Options remain
outstanding.
(g) For purposes of this Agreement, "Cash Portion Option Exchange
Multiple" means the quotient obtained by dividing (x) the Cash Portion by (y)
the Average Parent Stock Price.
(h) For purposes of this Agreement, "Average Parent Stock Price" means
the average of the volume weighted averages of the trading prices of Parent
Common Stock, as such price is reported on the NYSE Composite Transaction Tape
(as reported by Bloomberg Financial Markets or such other source as the parties
shall agree in writing), for the 15 trading days ending on the third trading day
immediately preceding the Effective Time.
(i) Prior to the Effective Time, each of Parent and the Company shall
use reasonable best efforts to cause any dispositions of Company Common Stock
(including derivative securities with respect to Company Common Stock) or
acquisitions of Parent Common Stock (including derivative securities with
respect to Parent Common Stock) resulting from the transactions contemplated by
this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the Exchange Act with respect to the Company to be exempt
under Rule 16b-3 promulgated under the Exchange Act, such efforts to include all
steps required be taken in accordance with the No-Action Letter dated January
12, 1999, issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
SECTION 5.05. Indemnification, Exculpation and Insurance. (a) Parent
shall cause the Surviving Corporation to assume the obligations with respect to
all rights to indemnification and exculpation from liabilities, including
advancement of expenses, for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current or former directors or
officers of the Company as provided in the Company Articles, the Company By-laws
or any indemnification Contract between such directors or officers and the
Company (in each case, as in effect on the date hereof), without further action,
as of the Effective Time and such obligations shall survive the Merger and shall
continue in full force and effect in accordance with their terms.
(b) In the event that the Surviving Corporation or any of its
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 other assets to any person, then, and in each such case, Parent
shall cause proper provision to be made so that the successors and assigns of
the Surviving Corporation shall expressly assume the obligations set forth in
this Section 5.05. In the event (A) the Surviving Corporation transfers any
material portion of its assets, in a single transaction or in a series of
transactions or (B) Parent takes any action to materially impair the financial
ability of the Surviving Corporation to satisfy the obligations referred to in
Section 5.05(a), Parent will either guarantee such obligations or take such
other action to insure that the ability of the Surviving Corporation, legal and
financial, to satisfy such obligations will not be diminished in any material
respect.
(c) For six years after the Effective Time, Parent shall maintain
(directly or indirectly through the Company's existing insurance programs) in
effect the Company's current directors' and officers' liability insurance in
respect of acts or omissions occurring at or prior to the Effective Time,
covering each person currently covered by the Company's directors' and officers'
liability insurance policy (a complete and accurate copy of which has been
heretofore delivered to Parent), on terms with respect to such coverage and
amounts no less favorable than those of such policy in effect on the date
hereof; provided, however, that Parent may (i) substitute therefor policies of
Parent containing terms with respect to coverage (including as coverage relates
to deductibles and exclusions) and amounts no less favorable to such directors
and officers or (ii) request that the Company obtain such extended reporting
period coverage under its existing insurance programs (to be effective as of the
Effective Time); provided further, however, that in satisfying its obligation
under this Section 5.05(c), neither the Company nor Parent shall be obligated to
pay more than in the aggregate the amount set forth in Section 5.05(c) of the
Company Disclosure Schedule to obtain such coverage. It is understood and agreed
that in the event such coverage cannot be obtained for such amount or less in
the aggregate, Parent shall only be obligated to provide such coverage as may be
obtained for such aggregate amount.
(d) The provisions of this Section 5.05 (i) are intended to be for the
benefit of, and will be enforceable by, each indemnified party, his or her heirs
and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by Contract or otherwise.
SECTION 5.06. Fees and Expenses. (a) Except as provided in paragraphs
(b), (c) and (d) of this Section 5.06, all fees and expenses incurred in
connection with this Agreement, the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated, except that expenses
incurred in connection with the printing and mailing of the Form S-4 and the
Proxy Statement shall be shared equally by Parent and the Company.
(b) In the event that (i) this Agreement is terminated by Parent
pursuant to Section 7.01(e) (other than as a result of a Company Adverse
Recommendation Change following the occurrence of a Parent Material Adverse
Effect), (ii) this Agreement is terminated by the Company pursuant to Section
7.01(f) or (iii) (A) prior to the obtaining of the Shareholder Approval, a
Takeover Proposal shall have been made to the Company or shall have been made
directly to the shareholders of the Company generally or shall have otherwise
become publicly known or any person shall have publicly announced an intention
(whether or not conditional) to make a Takeover Proposal, (B) thereafter this
Agreement is terminated by either Parent or the Company pursuant to Section
7.01(b)(i) (but only if a vote to obtain the Shareholder Approval or the
Shareholders' Meeting has not been held) or Section 7.01(b)(iii) and (C) within
12 months after such termination, the Company enters into a definitive Contract
to consummate, or consummates, the transactions contemplated by any Takeover
Proposal, then the Company shall pay Parent a fee equal to $625,000,000 (the
"Parent Termination Fee") by wire transfer of same-day funds on the first
business day following (x) in the case of a payment required by clause (i) or
(ii) above, the date of termination of this Agreement and (y) in the case of a
payment required by clause (iii) above, the date of the first to occur of the
events referred to in clause (iii)(C). For purposes of clause (iii)(C) of the
immediately preceding sentence only, the term "Takeover Proposal" shall have the
meaning assigned to such term in Section 4.02(a) except that all references to
"15%" therein shall be deemed to be references to "35%".
(c) In the event that (i) this Agreement is terminated pursuant to
Section 7.01(b)(i), 7.01(b)(ii) or 7.01(c)(ii) and (ii) at the time of any such
termination all of the conditions set forth in Article VI have been satisfied or
waived except for any of the conditions set forth in Section 6.01(b), 6.01(c),
6.01(d), 6.02(c) or 6.02(d) (in the case of Sections 6.01(d), 6.02(c) and
6.02(d), only to the extent that the conditions set forth therein have not been
satisfied due to a suit, action or proceeding by any national Governmental
Entity or the imposition of a Restraint, in either case relating to competition,
merger control, antitrust or similar Laws), then Parent shall pay to the Company
a fee equal to $300,000,000 (the "Company Termination Fee") by wire transfer of
same-day funds on the first business day following the date of termination of
this Agreement.
(d) The Company and Parent acknowledge and agree that the agreements
contained in Sections 5.06(b) and 5.06(c) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
the Company and Parent would not enter into this Agreement; accordingly, (i) if
the Company fails promptly to pay the amount due pursuant to Section 5.06(b),
and, in order to obtain such payment, Parent commences a suit that results in a
judgment against the Company for the Parent Termination Fee, the Company shall
pay to Parent its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the Parent
Termination Fee from the date such payment was required to be made until the
date of payment at the prime rate of Citibank, N.A., in effect on the date such
payment was required to be made; and (ii) if Parent fails promptly to pay the
amount due pursuant to Section 5.06(c), and, in order to obtain such payment,
the Company commences a suit that results in a judgment against Parent for the
Company Termination Fee, Parent shall pay to the Company its costs and expenses
(including attorneys' fees and expenses) in connection with such suit, together
with interest on the amount of the Company Termination Fee from the date such
payment was required to be made until the date of payment at the prime rate of
Citibank, N.A., in effect on the date such payment was required to be made.
SECTION 5.07. Public Announcements. Except with respect to any Company
Adverse Recommendation Change made in accordance with the terms of this
Agreement, Parent and the Company shall consult with each other before issuing,
and give each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions contemplated
by this Agreement, including the Merger, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
such party may reasonably conclude may be required by applicable Law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
SECTION 5.08. Affiliates. As soon as practicable after November 14,
2005, the Company shall deliver to Parent a letter identifying all persons who
at the time this Agreement is submitted for adoption by the shareholders of the
Company may be deemed to be "affiliates" of the Company for purposes of Rule 145
under the Securities Act. The Company shall use its reasonable best efforts to
cause each such person to deliver to Parent at least 30 days prior to the
Closing Date a written agreement substantially in the form attached as Exhibit B
hereto.
SECTION 5.09. Stock Exchange Listing. To the extent Parent does not
issue or intend to issue treasury shares in the Merger or to holders of Adjusted
Options that are already listed, Parent shall use its reasonable best efforts to
cause the shares of Parent Common Stock to be issued in the Merger and to
holders of Adjusted Options to be promptly approved for listing on the NYSE,
subject to official notice of issuance, prior to the Closing Date.
SECTION 5.10. Shareholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and/or its directors relating to the transactions
contemplated by this Agreement, and no such settlement shall be agreed to
without Parent's prior written consent.
SECTION 5.11. Employee Matters. (a) (i)For a period of twelve months
following the Effective Time, the employees of the Company and its Subsidiaries
who remain in the employment of the Surviving Corporation and its Subsidiaries
(the "Continuing Employees") shall receive employee benefits that in the
aggregate are substantially comparable to the employee benefits provided to such
employees immediately prior to the Effective Time; (ii) for the six-month period
immediately following the expiration of the twelve-month period described in the
preceding clause (i), the Continuing Employees shall receive employee benefits
that in the aggregate are substantially comparable to either the employee
benefits provided to such employees immediately prior to the Effective Time or
the employee benefits provided to similarly situated employees of Parent and its
Subsidiaries; and (iii) for a period of not less than eighteen months following
the Effective Time, the Continuing Employees shall receive base salary or wage
rates that are not less than those in effect for such Continuing Employees
immediately prior to the Effective Time; provided that neither Parent nor the
Surviving Corporation nor any of their Subsidiaries shall have any obligation to
issue, or adopt any plans or arrangements providing for the issuance of, shares
of capital stock, warrants, options, stock appreciation rights or other rights
in respect of any shares of capital stock of any entity or any securities
convertible or exchangeable into such shares pursuant to any such plans or
arrangements; provided, further, that no plans or arrangements of the Company or
any of its Subsidiaries providing for such issuance shall be taken into account
in determining whether employee benefits are substantially comparable in the
aggregate.
(b) Nothing contained herein shall be construed as requiring, and the
Company shall take no action that would have the effect of requiring, Parent or
the Surviving Corporation to continue any specific employee benefit plans or to
continue the employment of any specific person.
(c) Parent shall cause the Surviving Corporation to recognize the
service of each Continuing Employee as if such service had been performed with
Parent (i) for purposes of vesting (but not benefit accrual) under Parent's
defined benefit pension plan, (ii) for purposes of eligibility for vacation
under Parent's vacation program, (iii) for purposes of eligibility and
participation under any health or welfare plan maintained by Parent (other than
any post-employment health or post-employment welfare plan) , (iv) for purposes
of eligibility for the company matching contribution under Parent's 401(k)
savings plan (it being understood that each Continuing Employee who was
participating in the Company's 401(k) savings plan immediately prior to becoming
eligible to participate in Parent's 401(k) savings plan shall be immediately
eligible for the company matching contribution under Parent's 401(k) savings
plan) and (v) unless covered under another arrangement with or of the Company,
for benefit accrual purposes under Parent's severance plan (in the case of each
of clauses (i), (ii), (iii), (iv) and (v), solely to the extent that Parent
makes such plan or program available to employees of the Surviving Corporation,
it being Parent's current intention to do so), but not for purposes of any other
employee benefit plan of Parent.
(d) With respect to any welfare plan maintained by Parent in which
Continuing Employees are eligible to participate after the Effective Time,
Parent shall, and shall cause the Surviving Corporation to, (i) waive all
limitations as to preexisting conditions and exclusions with respect to
participation and coverage requirements applicable to such employees to the
extent such conditions and exclusions were satisfied or did not apply to such
employees under the welfare plans maintained by the Company prior to the
Effective Time and (ii) provide each Continuing Employee with credit for any
co-payments and deductibles paid prior to the Effective Time in satisfying any
analogous deductible or out-of-pocket requirements to the extent applicable
under any such plan.
(e) Subject to the provisions of Section 5.11(a) through (d), Parent
shall assume all obligations under and honor in accordance with their terms, and
shall cause the Surviving Corporation to honor in accordance with their terms,
the Company Benefit Plans and Company Benefit Agreements listed on Section
5.11(e) of the Company Disclosure Schedule (as modified, if applicable, as
agreed between Parent and individual employees of the Company or its
Subsidiaries). Parent acknowledges and agrees that the Merger will constitute a
"change in control" within the meaning of the Company Benefit Plans and Company
Benefit Agreements which include a definition of such (or substantially similar)
concept, except to the extent otherwise agreed between Parent and individual
employees of the Company and its Subsidiaries.
(f) Notwithstanding the foregoing provisions of Section 5.11, the
provisions of Section 5.11(a), (c) and (d) shall apply only with respect to
Continuing Employees who are covered under Company Benefit Plans that are
maintained primarily for the benefit of employees employed in the United States
(including Continuing Employees regularly employed outside the United States to
the extent they participate in such Company Benefit Plans). With respect to
Continuing Employees not described in the preceding sentence, Parent shall, and
shall cause the Surviving Corporation and its Subsidiaries to, comply with all
applicable laws, directives and regulations relating to employees and employee
benefits matters applicable to such employees.
SECTION 5.12. Company Notes. Each of the Company, Parent and Sub shall
take each action required to be taken by such party pursuant to the Indenture
dated as of January 18, 1996, between the Company and Citibank, N.A., with
respect to the Company Notes, as necessary to consummate the Merger and the
other transactions contemplated by this Agreement in compliance therewith.
SECTION 5.13. Rights Agreement. The Board of Directors of the Company
shall take all further actions (in addition to those referred to in Section
3.01(v)) requested by Parent in order to render the Company Rights inapplicable
to the Merger and the other transactions contemplated by this Agreement. Except
as provided above with respect to the Merger and the other transactions
contemplated by this Agreement, the Board of Directors of the Company shall not,
without the prior written consent of Parent, amend, take any action with respect
to, or make any determination under, the Rights Agreement (including a
redemption of the Company Rights) to facilitate a Takeover Proposal.
ARTICLE VI
Conditions Precedent
SECTION 6.01. 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 (to the extent permitted by Law) waiver by Parent and the
Company on or prior to the Closing Date of the following conditions:
(a) Shareholder Approval. The Shareholder Approval shall have been
obtained.
(b) NYSE Listing. The shares of Parent Common Stock issuable to the
shareholders of the Company and to holders of Adjusted Options as contemplated
by this Agreement shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(c) Antitrust. (i) The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired and (ii) the European Commission shall have issued a decision under
Article 6(1)(b), 8(1) or 8(2) of the EC Merger Regulation (or shall have been
deemed to have done so under Article 10(6) of the EC Merger Regulation)
declaring the Merger compatible with the EC Common Market (and/or, as may be the
case, any national competition authority in the EC to which all or part of the
case may have been transferred shall have issued a decision with similar effect
or have been deemed to have done so).
(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other judgment or order issued by any
court or agency of competent jurisdiction or other Law, rule, legal restraint or
prohibition (collectively, "Restraints") shall be in effect preventing the
consummation of the Merger.
(e) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
SECTION 6.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction or (to the extent permitted by Law) waiver by Parent 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 Sections 3.01(c), 3.01(d), 3.01(g)(iv)
(but only with respect to current and former directors and Tier I Employees),
3.01(i)(2)(A), 3.01(q), 3.01(r) (but not with respect to the last sentence
thereof) and 3.01(v) of this Agreement that are qualified as to materiality or
by reference to Material Adverse Effect or Material Adverse Change shall be true
and correct, and such representations and warranties of the Company that are not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement and as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date, in which case as of such earlier date, (ii) the
representations and warranties of the Company contained in Sections
3.01(i)(2)(B) and (C) shall be true and correct as of the date of this Agreement
as though made on the Closing Date, except to the extent that the facts or
matters as to which such representations and warranties are not so true and
correct as of such date, individually or in the aggregate, would not reasonably
be expected to have a material adverse effect on the reasonably expected
benefits of the Merger to Parent and (iii) all other representations and
warranties of the Company contained 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
the Closing Date, except to the extent such representations and warranties
expressly relate to a specified date, in which case as of such specified date,
and except further, in the case of this clause (iii), to the extent that the
facts or matters as to which such representations and warranties are not so true
and correct as of such dates (without giving effect to any qualifications or
limitations as to materiality or Material Adverse Effect or Material Adverse
Change set forth therein), individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect. Parent shall
have received a certificate signed on behalf of the Company by an executive
officer of the Company to such effect.
(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, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(c) No Litigation. There shall not be pending any suit, action or
proceeding by any national Governmental Entity (i) seeking to restrain or
prohibit the consummation of the Merger or any other transaction contemplated by
this Agreement or seeking to obtain from the Company, Parent, Sub or any other
Affiliate of Parent any damages that are material in relation to the Company,
(ii) seeking to impose limitations on the ability of Parent or any Affiliate of
Parent to hold, or exercise full rights of ownership of, any shares of capital
stock of the Surviving Corporation, including the right to vote such shares on
all matters properly presented to the shareholders of the Surviving Corporation,
(iii) seeking to prohibit Parent or any of its Affiliates from effectively
controlling in any material respect the business or operations of the Company or
any of its Affiliates, (iv) seeking any Divestiture that is not required to be
effected pursuant to the terms of this Agreement or (v) that has had or would
reasonably be expected to have a Material Adverse Effect or Parent Material
Adverse Effect.
(d) Restraints. No Restraint that would reasonably be expected to
result, directly or indirectly, in any of the effects referred to in clauses (i)
through (v) of paragraph (c) of this Section 6.02 shall be in effect.
SECTION 6.03. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further subject to the satisfaction or
(to the extent permitted by Law) waiver by the Company on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. (i) The representations and
warranties of Parent and Sub contained in Section 3.02(b) of this Agreement that
are qualified as to materiality or by reference to Parent Material Adverse
Effect or Parent Material Adverse Change shall be true and correct, and such
representations and warranties of Parent that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date and (ii) all other representations
and warranties of Parent contained 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
the Closing Date, except to the extent such representations and warranties
expressly relate to a specified date, in which case as of such specified date,
and except further, in the case of this clause (ii), to the extent that the
facts or matters as to which such representations and warranties are not so true
and correct as of such dates (without giving effect to any qualifications or
limitations as to materiality or Parent Material Adverse Effect or Parent
Material Adverse Change set forth therein), individually or in the aggregate,
have not had and would not reasonably be expected to have a Parent Material
Adverse Effect. The Company shall have received a certificate signed on behalf
of Parent by an executive officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent by an executive
officer of Parent to such effect.
SECTION 6.04. Frustration of Closing Conditions. None of the Company,
Parent or Sub may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to act in good faith or to use its reasonable
best efforts to consummate the Merger and the other transactions contemplated by
this Agreement, as required by and subject to Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
SECTION 7.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of the Shareholder
Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or before March
31, 2006; provided, however, that the right to terminate this Agreement under
this Section 7.01(b)(i) shall not be available to any party whose wilful breach
of a representation or warranty in this Agreement or whose other action or
failure to act has been a principal cause of or resulted in the failure of the
Merger to be consummated on or before such date;
(ii) if any Restraint having any of the effects set forth in Section
6.01(d) shall be in effect and shall have become final and nonappealable; or
(iii) if the Shareholder Approval shall not have been obtained at the
Shareholders' Meeting duly convened therefor or at any adjournment or
postponement thereof;
(c) by Parent (i) if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or agreements set
forth in this Agreement, which breach or failure to perform (A) would give rise
to the failure of a condition set forth in Section 6.02(a) or 6.02(b) and (B) is
incapable of being cured by the Company within 30 calendar days following
receipt of written notice of such breach or failure to perform from Parent or
(ii) if any Restraint having the effects referred to in clauses (i) through (v)
of Section 6.02(c) shall be in effect and shall have become final and
nonappealable;
(d) by the Company, if Parent shall have breached or failed to perform
any of its representations, warranties, covenants or agreements set forth in
this Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 6.03(a) or 6.03(b) and (B) is
incapable of being cured by Parent within 30 calendar days following receipt of
written notice of such breach or failure to perform from the Company;
(e) by Parent, in the event that prior to the obtaining of the
Shareholder Approval (i) a Company Adverse Recommendation Change shall have
occurred or (ii) the Board of Directors of the Company fails publicly to
reaffirm its adoption and recommendation of this Agreement, the Merger or the
other transactions contemplated by this Agreement within ten business days of
receipt of a written request by Parent to provide such reaffirmation following a
Takeover Proposal; or
(f) by the Company in accordance with the terms and subject to the
conditions of Section 4.02(b).
SECTION 7.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company under this Agreement,
other than the provisions of Section 3.01(s) and 3.02(g), the second, third and
fourth sentences of Section 5.02(a), Section 5.06, this Section 7.02 and Article
VIII, which provisions shall survive such termination; provided, however, that
no such termination shall relieve any party hereto from any liability or damages
resulting from the wilful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the parties
hereto at any time before or after receipt of the Shareholder Approval;
provided, however, that after such approval has been obtained, there shall be
made no amendment that by applicable Law requires further approval by the
shareholders of the Company without such approval having been obtained. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 7.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) to the extent permitted by
applicable Law, waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) subject to
the proviso to the first sentence of Section 7.03 and to the extent permitted by
applicable Law, waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights nor shall any single or partial exercise by any party to this
Agreement of any of its rights under this Agreement preclude any other or
further exercise of such rights or any other rights under this Agreement.
SECTION 7.05. Procedure for Termination or Amendment. A termination of
this Agreement pursuant to Section 7.01 or an amendment of this Agreement
pursuant to Section 7.03 shall, in order to be effective, require, in the case
of Parent or the Company, action by its Board of Directors or, with respect to
any amendment of this Agreement pursuant to Section 7.03, the duly authorized
committee of its Board of Directors to the extent permitted by applicable Law.
ARTICLE VIII
General Provisions
SECTION 8.01. 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 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 8.02. Notices. Except for notices that are specifically
required by the terms of this Agreement to be delivered orally, all notices,
requests, claims, demands and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to Parent or Sub, to:
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Office of General Counsel
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, III, Esq.
if to the Company, to:
Guidant Corporation
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "Knowledge" of any person that is not an individual means, with
respect to any matter in question, the actual knowledge of such person's
executive officers after making due inquiry of the current Tier I Employees and
Tier II Employees having primary responsibility for such matter;
(c) "Material Adverse Change" or "Material Adverse Effect" means any
change, effect, event, occurrence, state of facts or development which
individually or in the aggregate would reasonably be expected to result in any
change or effect, that is materially adverse to the business, financial
condition or results of operations of the Company and its Subsidiaries, taken as
a whole; provided, that none of the following shall be deemed, either alone or
in combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse
Change or Material Adverse Effect: (A) any change, effect, event, occurrence,
state of facts or development (1) in the financial or securities markets or the
economy in general, (2) in the industries in which the Company or any of its
Subsidiaries operates in general, to the extent that such change, effect, event,
occurrence, state of facts or development does not disproportionately impact the
Company or any of its Subsidiaries, or (3) resulting from any Divestiture
required to be effected pursuant to the terms of this Agreement or (B) any
failure, in and of itself, by the Company to meet any internal or published
projections, forecasts or revenue or earnings predictions (it being understood
that the facts or occurrences giving rise or contributing to such failure may be
deemed to constitute, or be taken into account in determining whether there has
been or would reasonably be expected to be, a Material Adverse Effect or a
Material Adverse Change);
(d) "Parent Material Adverse Change" or "Parent Material Adverse
Effect" means any change, effect, event, occurrence, state of facts or
development which individually or in the aggregate would reasonably be expected
to result in any change or effect, that is materially adverse to the business,
financial condition or results of operations of Parent and its Subsidiaries,
taken as a whole; provided, that none of the following shall be deemed, either
alone or in combination, to constitute, and none of the following shall be taken
into account in determining whether there has been or will be, a Parent Material
Adverse Change or Parent Material Adverse Effect: (A) any change, effect, event,
occurrence, state of facts or development (1) in the financial or securities
markets or the economy in general, (2) in the industries in which Parent or any
of its Subsidiaries operates in general, to the extent that such change, effect,
event, occurrence, state of facts or development does not disproportionately
impact Parent or any of its Subsidiaries or (3) resulting from any Divestiture
required to be effected pursuant to the terms of this Agreement or (B) any
failure, in and of itself, by Parent to meet any internal or published
projections, forecasts or revenue or earnings predictions (it being understood
that the facts or occurrences giving rise or contributing to such failure may be
deemed to constitute, or be taken into account in determining whether there has
been or would reasonably be expected to be, a Parent Material Adverse Effect or
a Parent Material Adverse Change);
(e) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity; and
(f) a "Subsidiary" of any person means another person, an amount of the
voting securities, other voting rights or voting partnership interests of which
is sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be
to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to "this Agreement" shall include the Company Disclosure
Schedule. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
Contract, instrument or Law defined or referred to herein or in any Contract or
instrument that is referred to herein means such Contract, instrument or Law as
from time to time amended, modified or supplemented, including (in the case of
Contracts or instruments) by waiver or consent and (in the case of Laws) by
succession of comparable successor Laws and references to all attachments
thereto and instruments incorporated therein. References to a person are also to
its permitted successors and assigns.
SECTION 8.05. Consents and Approvals. For any matter under this
Agreement requiring the consent or approval of any party to be valid and binding
on the parties hereto, such consent or approval must be in writing. SECTION
8.06. Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile), 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 8.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the Exhibits and Schedules) and the Confidentiality
Agreement and any agreements entered into contemporaneously herewith (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and the Confidentiality Agreement and (b)
except for the provisions of Article II and Section 5.05, are not intended to
and do not confer upon any person other than the parties any legal or equitable
rights or remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
SECTION 8.09. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, and any assignment without such consent shall be
null and void, except that Sub, upon prior written notice to the Company, may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned Subsidiary of Parent, but no such assignment shall relieve Parent or Sub
of any of its obligations hereunder. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 8.10. Specific Enforcement; Consent to Jurisdiction. The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the United
States District Court for the Southern District of New York, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the United States District Court for the Southern
District of New York in the event any dispute arises out of this Agreement or
the transactions contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court other than the United States District Court for the Southern District
of New York.
SECTION 8.11. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable Law, any right it may have to a trial
by jury in respect of any suit, action or other proceeding arising out of this
Agreement or the transactions contemplated hereby. Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event of
any action, suit or proceeding, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 8.11.
SECTION 8.12. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable Law in an acceptable manner to the end that the
transactions contemplated by this Agreement are fulfilled to the extent
possible.
IN WITNESS WHEREOF, Parent, Sub 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.
XXXXXXX & XXXXXXX,
by
/s/ XXXXXX X. XXXXXXXX
------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice Chairman and Chief Financial Officer
SHELBY MERGER SUB, INC.,
by
/s/ XXXXX X. XXXXXX
------------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
GUIDANT CORPORATION,
by
/s/ XXXXXX X. XXXXXXX
------------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ANNEX I
TO THE AMENDED AND RESTATED MERGER AGREEMENT
Index of Defined Terms
----------------------
Term
Acquisition Agreement............................................Section 4.02(b)
Actions..........................................................Section 4.01(d)
Adjusted Option..................................................Section 5.04(a)
Affiliate........................................................Section 8.03(a)
Agreement...............................................................Preamble
Alza.............................................................Section 3.02(h)
Antitrust Filings...................................................Section 5.03
Articles of Merger..................................................Section 1.03
Average Parent Stock Price.......................................Section 5.04(h)
Cash Portion.....................................................Section 2.01(c)
Cash Portion Option Exchange Multiple ...........................Section 5.04(g)
Certificate......................................................Section 2.01(c)
Closing.............................................................Section 1.02
Closing Date........................................................Section 1.02
Closing Price....................................................Section 2.02(e)
Code.....................................................................2.02(j)
Commonly Controlled Entity.......................................Section 3.01(l)
Company.................................................................Preamble
Company Adverse Recommendation Change............................Section 4.02(b)
Company Articles....................................................Section 1.05
Company Benefit Agreements.......................................Section 3.01(g)
Company Benefit Plans............................................Section 3.01(l)
Company By-laws..................................................Section 3.01(a)
Company Common Stock....................................................Recitals
Company Disclosure Schedule.........................................Section 3.01
Company Notes....................................................Section 4.01(a)
Company Pension Plan.............................................Section 3.01(l)
Company Preferred Stock..........................................Section 3.01(c)
Company Restricted Stock.........................................Section 3.01(c)
Company Rights...................................................Section 3.01(v)
Company SEC Documents............................................Section 3.01(e)
Company Series A Preferred Stock.................................Section 3.01(c)
Company Stock-Based Awards.......................................Section 3.01(c)
Company Stock Options............................................Section 3.01(c)
Company Stock Plans..............................................Section 3.01(c)
Company Termination Fee..........................................Section 5.06(c)
Company Welfare Plan.............................................Section 3.01(l)
Confidentiality Agreement...........................................Section 5.02
Continuing Employees.............................................Section 5.11(a)
Contract.........................................................Section 3.01(d)
EC Merger Regulation.............................................Section 3.01(d)
Effective Time......................................................Section 1.03
Environmental Laws...............................................Section 3.01(j)
ERISA............................................................Section 3.01(j)
ESPP.............................................................Section 3.01(c)
Excess Distribution..............................................Section 4.01(d)
Exchange Act.....................................................Section 3.01(d)
Exchange Agent...................................................Section 2.02(a)
Exchange Fund....................................................Section 2.02(a)
Exchange Ratio...................................................Section 2.01(c)
FDA..............................................................Section 3.01(u)
FDCA.............................................................Section 3.01(j)
Filed Company SEC Documents.........................................Section 3.01
Filed Parent SEC Documents .........................................Section 3.02
Form S-4............................................................Section 5.01
GAAP.............................................................Section 3.01(e)
Governmental Entity..............................................Section 3.01(d)
Hazardous Materials..............................................Section 3.01(j)
HSR Act..........................................................Section 3.01(d)
HSR Filing..........................................................Section 5.03
IBCL................................................................Section 1.01
Intellectual Property Rights.....................................Section 3.01(p)
IRS..............................................................Section 3.01(l)
Key Personnel....................................................Section 3.01(g)
Knowledge........................................................Section 8.03(b)
Law..............................................................Section 3.01(d)
Legal Provisions.................................................Section 3.01(j)
Liens............................................................Section 3.01(b)
Material Adverse Change..........................................Section 8.03(c)
Material Adverse Effect..........................................Section 8.03(c)
Medical Device...................................................Section 3.01(u)
Merger..................................................................Recitals
Merger Consideration.............................................Section 2.01(c)
New Rights Plan.....................................................Section 5.13
Non-U.S. Subsidiary..............................................Section 4.01(d)
Notice of Superior Proposal......................................Section 4.02(b)
NYSE.....................................................................2.02(e)
Order....................................................................3.01(d)
Original Merger Agreement...............................................Preamble
Paragraph 6..............................................................3.01(r)
Parent..................................................................Preamble
Parent Common Stock.....................................................Recitals
Parent Disclosure Schedule..........................................Section 3.02
Parent Material Adverse Change...................................Section 8.03(d)
Parent Material Adverse Effect...................................Section 8.03(d)
Parent Preferred Stock...........................................Section 3.02(h)
Parent SEC Documents.............................................Section 3.02(c)
Parent Termination Fee...........................................Section 5.06(b)
Permits..........................................................Section 3.01(j)
Person...........................................................Section 8.03(e)
Post-Signing Returns.............................................Section 4.01(d)
Primary Company Executives.......................................Section 3.01(m)
Proxy Statement..................................................Section 3.01(d)
Representatives..................................................Section 4.02(a)
Release..........................................................Section 3.01(j)
Restraints.......................................................Section 6.01(d)
Rights Agreement.................................................Section 3.01(v)
SEC..............................................................Section 3.01(d)
Securities Act...................................................Section 3.01(e)
Shareholder Approval.............................................Section 3.01(q)
Shareholders' Meeting............................................Section 5.01(b)
Significant Subsidiary ..........................................Section 3.01(a)
Social Security Act..............................................Section 3.01(u)
SOX..............................................................Section 3.01(e)
Stock Portion....................................................Section 2.01(c)
Sub.....................................................................Preamble
Sub Articles.....................................................Section 3.02(a)
Subsidiary.......................................................Section 8.03(g)
Superior Proposal................................................Section 4.02(a)
Surviving Corporation...............................................Section 1.01
Takeover Proposal................................................Section 4.02(a)
tax..............................................................Section 3.01(n)
taxing authority.................................................Section 3.01(n)
tax return.......................................................Section 3.01(n)
Tier I Employee..................................................Section 3.01(g)
Tier II Employee.................................................Section 3.01(g)
EXHIBIT A
TO THE AMENDED AND RESTATED MERGER AGREEMENT
Restated Articles of Incorporation
----------------------------------
of the Surviving Corporation
----------------------------
FIRST: The name of the corporation (hereinafter called the
"Corporation") is Guidant Corporation.
SECOND: The aggregate number of shares which the Corporation shall have
authority to issue is 1,000 shares of Common Stock, without par value.
THIRD: The street address of the Corporation's initial registered
office in Indiana is 000 Xxxx XxXxxxx Xxxxxx, Xxxxxxxxxxxx 00000 and the name of
its initial registered agent at that office is [Name of Agent].
FOURTH: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the Business
Corporation Law of the State of Indiana.
FIFTH: In furtherance and not in limitation of the powers conferred
upon it by law, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the Corporation.
SIXTH: To the fullest extent permitted by the Business Corporation Law
of the State of Indiana as it now exists and as it may hereafter be amended, no
director or officer of the Corporation shall be personally liable to the
Corporation or any of its shareholders for monetary damages for breach of
fiduciary duty as a director or officer.
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 23-1-37 of the Business Corporation Law of the State of Indiana, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said Section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
Section. Such indemnification shall be mandatory and not discretionary. The
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of shareholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person. Any repeal or
modification of this Article SEVENTH shall not adversely affect any right to
indemnification of any persons existing at the time of such repeal or
modification with respect to any matter occurring prior to such repeal or
modification.
The Corporation shall to the fullest extent permitted by the Business
Corporation Law of the State of Indiana advance all costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred by any
director or officer within 15 days of the presentation of same to the
Corporation, with respect to any one or more actions, suits or proceedings,
whether civil, criminal, administrative or investigative, so long as the
Corporation receives from the director or officer a written affirmation required
by the Business Corporation Law of the State of Indiana of his or her good faith
belief that he or she has met the applicable standard of conduct established by
the Business Corporation Law of the State of Indiana, together with an unsecured
undertaking to repay such expenses if it shall ultimately be determined that
such director or officer is not entitled to be indemnified by the Corporation
under the Business Corporation Law of the State of Indiana. Such obligation to
advance costs and expenses shall be mandatory, and not discretionary, and shall
include, without limitation, costs and expenses incurred in asserting
affirmative defenses, counterclaims and cross claims. Such undertaking to repay
may, if first requested in writing by the applicable director or officer, be on
behalf of (rather than by) such director or officer, provided that in such case
the Corporation shall have the right to approve the party making such
undertaking.
EIGHTH: Unless and except to the extent that the By-laws of the
Corporation shall so require, the election of directors of the Corporation need
not be by written ballot.
EXHIBIT B
TO THE AMENDED AND RESTATED MERGER AGREEMENT
Form of Affiliate Letter
------------------------
Dear Sirs:
The undersigned, a holder of shares of common stock, without par value
("Company Common Stock"), of Guidant Corporation, an Indiana corporation (the
"Company"), acknowledges that the undersigned may be deemed an "affiliate" of
the Company within the meaning of Rule 145 ("Rule 145") promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), by the Securities and
Exchange Commission (the "SEC"). Pursuant to the terms of the Amended and
Restated Agreement and Plan of Merger dated as of November 14, 2005 (the "Merger
Agreement"), among Xxxxxxx & Xxxxxxx, a New Jersey corporation ("Parent"),
Shelby Merger Sub, Inc., an Indiana corporation and a wholly owned subsidiary of
Parent ("Sub"), and the Company, Merger Sub will be merged with and into the
Company (the "Merger"), and in connection with the Merger, the undersigned is
entitled to receive 0.493 shares of the common stock of Parent ("Parent Common
Stock") and $33.25 in cash for each share of Company Common Stock, without
interest.
If in fact the undersigned were an affiliate under the Securities Act,
the undersigned's ability to sell, assign or transfer the shares of Parent
Common Stock received by the undersigned in exchange for any shares of Company
Common Stock in connection with the Merger may be restricted unless such
transaction is registered under the Securities Act or an exemption from such
registration is available. The undersigned understands that such exemptions are
limited and the undersigned has obtained or will obtain advice of counsel as to
the nature and conditions of such exemptions, including information with respect
to the applicability to the sale of such securities of Rules 144 and 145(d)
promulgated under the Securities Act. The undersigned understands that Parent
will not be required to maintain the effectiveness of any registration statement
under the Securities Act for the purposes of resale of Parent Common Stock by
the undersigned.
The undersigned hereby represents to and covenants with Parent that the
undersigned will not sell, assign or transfer any of the shares of Parent Common
Stock received by the undersigned in exchange for shares of Company Common Stock
in connection with the Merger except (i) pursuant to an effective registration
statement under the Securities Act, (ii) in conformity with the volume and other
limitations of Rule 145 or (iii) in a transaction which, in the opinion of
counsel to the undersigned, such counsel to be reasonably satisfactory to Parent
and such opinion to be in form and substance reasonably satisfactory to Parent,
or as described in a "no-action" or interpretive letter from the Staff of the
SEC specifically issued with respect to a transaction to be engaged in by the
undersigned, is not required to be registered under the Securities Act.
In the event of a sale or other disposition by the undersigned of the
shares of Parent Common Stock pursuant to Rule 145, the undersigned will supply
Parent with evidence of compliance with such Rule, in the form of a letter in
the form of Annex I hereto or the opinion of counsel or no-action letter
referred to above. The undersigned understands that Parent may instruct its
transfer agent to withhold the transfer of any shares of Parent Common Stock
disposed of by the undersigned, but that (provided such transfer is not
prohibited by any other provision of this letter agreement) upon receipt of such
evidence of compliance, Parent shall cause the transfer agent to effectuate the
transfer of the shares of Parent Common Stock sold as indicated in such letter.
Parent covenants that it will take all such actions as may be
reasonably available to it to permit the sale or other disposition of the shares
of Parent Common Stock by the undersigned under Rule 145 in accordance with the
terms thereof.
The undersigned acknowledges and agrees that the legend set forth below
will be placed on certificates representing the shares of Parent Common Stock
received by the undersigned in connection with the Merger or held by a
transferee thereof, which legend will be removed by delivery of substitute
certificates (i) if the undersigned provides evidence of compliance with Rule
145 to Parent, in the form of a letter in the form of Annex I hereto, or (ii)
upon receipt of an opinion in form and substance reasonably satisfactory to
Parent from counsel reasonably satisfactory to Parent to the effect that such
legend is no longer required for purposes of the Securities Act.
There will be placed on the certificates for Parent Common Stock issued
to the undersigned in connection with the Merger, or any substitutions therefor,
a legend stating in substance:
"The shares represented by this certificate were issued
pursuant to a transaction to which Rule 145 promulgated under the
Securities Act of 1933 applies. The shares have not been acquired by
the holder with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of 1933.
The shares may not be sold, pledged or otherwise transferred except in
accordance with Rule 145, pursuant to a Registration Statement under
the Securities Act of 1933 or in accordance with an exemption from the
registration requirements of the Securities Act of 1933."
The undersigned acknowledges that (i) the undersigned has carefully
read this letter and understands the requirements hereof and the limitations
imposed upon the distribution, sale, transfer or other disposition of Parent
Common Stock and (ii) the receipt by Parent of this letter is an inducement to
Parent's obligations to consummate the Merger.
Execution of this letter should not be considered an admission on the
part of the undersigned that the undersigned is an "affiliate" of the Company as
described in the first paragraph of this letter, or as a waiver of any rights
the undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
Very truly yours,
Dated:
[Name] [Date]
On , the undersigned sold the securities of Xxxxxxx & Xxxxxxx
("Parent") described below in the space provided for that purpose (the
"Securities"). The Securities were received by the undersigned in connection
with the merger of Shelby Merger Sub, Inc., an Indiana corporation, with and
into Guidant Corporation, an Indiana corporation.
Based upon the most recent report or statement filed by Parent with the
Securities and Exchange Commission, the Securities sold by the undersigned were
within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
The undersigned hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Securities Act
or in transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale of the
Securities to any person other than to the broker who executed the order in
respect of such sale.
Very truly yours,
Dated:
