Exhibit (C)(1)
AGREEMENT AND PLAN OF MERGER
By and Among
▇▇▇▇▇▇▇ ELECTRIC CO.
EMERSUB LXXIV, INC.
and
▇▇▇▇▇▇ INDUSTRIES, INC.
May 12, 1999
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER............................................................2
SECTION 1.1. The Offer.......................................................2
SECTION 1.2. Company Actions.................................................3
ARTICLE II
THE MERGER...........................................................5
SECTION 2.1. The Merger......................................................5
SECTION 2.2. Effective Time..................................................5
SECTION 2.3. Effects of the Merger...........................................5
SECTION 2.4. Certificate of Incorporation and By-laws........................5
SECTION 2.5. Directors.......................................................5
SECTION 2.6. Officers........................................................5
SECTION 2.7. Effect on Capital Stock.........................................5
(a) Capital Stock of Sub.................................................6
(b) Cancellation of Treasury Stock and Parent Owned Stock................6
(c) Conversion of Shares.................................................6
(d) Shares of Dissenting Stockholders....................................6
SECTION 2.8. Exchange of Certificates........................................6
(a) Paying Agent.........................................................6
(b) Parent to Provide Funds..............................................6
(c) Exchange Procedure...................................................7
(d) No Further Ownership Rights in Shares................................7
SECTION 2.9. Withholding Rights..............................................8
SECTION 2.10. Lost Certificates..............................................8
ARTICLE III
REPRESENTATIONS AND WARRANTIES.......................................8
SECTION 3.1. Representations and Warranties of the Company...................8
(a) Organization, Standing and Power.....................................8
(b) Subsidiaries.........................................................9
(c) Capital Structure....................................................9
(d) Authority; Non-contravention........................................10
(e) SEC Documents.......................................................11
(f) Information Supplied................................................12
(g) Absence of Certain Changes or Events................................12
(h) State Takeover Statutes; Absence of Supermajority Provision.........13
(i) Brokers.............................................................13
(j) Litigation..........................................................13
(k) Employee Benefit Matters............................................14
(l) Taxes...............................................................16
(m) No Excess Parachute Payments........................................17
(n) Environmental Matters...............................................17
(o) Compliance with Laws................................................18
(p) Material Contracts and Agreements...................................18
(q) Title to Properties.................................................19
(r) Intellectual Property...............................................19
(s) Labor Matters.......................................................20
(t) Undisclosed Liabilities.............................................20
(u) Board Recommendation................................................20
SECTION 3.2. Representations and Warranties of Parent and Sub...............20
(a) Organization; Standing and Power....................................20
(b) Authority; Non-contravention........................................21
(c) Information Supplied................................................22
(d) Brokers. ...........................................................22
(e) Litigation..........................................................22
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS...........................22
SECTION 4.1. Conduct of Business of the Company.............................22
(a) Ordinary Course.....................................................22
(b) Changes in Employment Arrangements..................................25
(c) Severance...........................................................25
(d) Other Actions.......................................................25
ARTICLE V
ADDITIONAL AGREEMENTS...............................................26
SECTION 5.1. Stockholder Approval; Preparation of Proxy Statement...........26
SECTION 5.2. Access to Information..........................................26
SECTION 5.3. Reasonable Efforts; Notification...............................28
SECTION 5.4. Employee Benefit Matters.......................................30
SECTION 5.5. Indemnification................................................31
SECTION 5.6. Fees and Expenses..............................................32
SECTION 5.7. Public Announcements...........................................32
SECTION 5.8. Stockholder Litigation.........................................33
SECTION 5.9. Directors......................................................33
SECTION 5.10. Tax Certification..............................................34
ARTICLE VI
CONDITIONS PRECEDENT................................................34
SECTION 6.1. Conditions to Each Party's Obligation to Effect the Merger.....34
(a) Stockholder Approval................................................34
(b) Other Approvals.....................................................34
(c) No Injunctions or Restraints........................................34
SECTION 6.2. Conditions to Obligation of Parent and Sub.....................34
SECTION 6.3. Condition to Obligation of the Company.........................35
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER...................................35
SECTION 7.1. Termination....................................................35
SECTION 7.2. Procedure for Termination, Amendment, Extension or Waiver......36
SECTION 7.3. Effect of Termination..........................................37
SECTION 7.4. Amendment......................................................37
SECTION 7.5. Extension; Waiver..............................................37
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS............................38
SECTION 8.1. Takeover Defenses of the Company and Standstill Agreements.....38
SECTION 8.2. No Solicitation................................................38
SECTION 8.3. Fee and Expense Reimbursements.................................40
ARTICLE IX
GENERAL PROVISIONS..................................................41
SECTION 9.1. Nonsurvival of Representations and Warranties..................41
SECTION 9.2. Notices........................................................41
SECTION 9.3. Definitions....................................................43
SECTION 9.4. Interpretation.................................................44
SECTION 9.5. Counterparts...................................................44
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries.................44
SECTION 9.7. Governing Law..................................................44
SECTION 9.8. Assignment.....................................................44
SECTION 9.9. Enforcement of the Agreement...................................44
SECTION 9.10. WAIVER OF JURY TRIAL..........................................45
SECTION 9.11. Performance by Sub............................................45
SECTION 9.12. Severability..................................................45
AGREEMENT AND PLAN OF MERGER dated as of May 12, 1999, among
▇▇▇▇▇▇▇ ELECTRIC CO., a Missouri corporation ("Parent"), EMERSUB LXXIV,
INC., a Delaware corporation ("Sub") and a wholly owned subsidiary of
Parent, and ▇▇▇▇▇▇ INDUSTRIES, INC., a Delaware corporation (the
"Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have approved the acquisition of the Company by Parent on the terms
and subject to the conditions of this Agreement and Plan of Merger (this
"Agreement");
WHEREAS, in furtherance of such acquisition, Parent proposes
to cause Sub to make a tender offer (as it may be amended from time to time as
permitted hereunder, the "Offer") to purchase all the issued and outstanding
shares of Common Stock, par value $1.25 per share, of the Company, including the
related right as to each Share to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value, of the Company
(singularly a "Right" and collectively, the "Rights") (singularly, a share of
such Common Stock including the related Right, a "Share" and collectively, the
"Shares"), at a price per Share of $21.25 net to the seller in cash, upon the
terms and subject to the conditions of this Agreement; and the Board of
Directors of the Company has adopted resolutions approving the Offer and the
Merger (as hereinafter defined) and recommending that the Company's stockholders
accept the Offer;
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions of this Agreement,
whereby each issued and outstanding Share not owned directly or indirectly by
Parent or the Company, except Shares held by persons who object to the Merger
and comply with all the provisions of Delaware law concerning the right of
holders of Shares to dissent from the Merger and require appraisal of their
Shares ("Dissenting Stockholders"), will be converted into the right to receive
the per share consideration paid to holders of Shares pursuant to the Offer; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Offer and the
Merger and also to prescribe various conditions to the Offer and the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreement herein contained, the parties agree as
follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than the fifth
business day from and including the date of public announcement of the terms of
this Agreement, Sub shall, and Parent shall cause Sub to, commence the Offer.
Unless earlier terminated in accordance with the provisions of this Agreement,
the Offer shall not expire before 12:00 midnight on the date that is 20 business
days from and including the date the Offer is commenced. The obligation of Sub
to, and of Parent to cause Sub to, commence the Offer shall be subject to the
conditions set forth in clauses (a) through (h) set forth in Exhibit A (any of
which may be waived by Sub in its sole discretion, and it being understood for
all purposes of this Agreement that the fact that any condition specified in the
first paragraph of Exhibit A shall not have been satisfied shall not, without
more, constitute a failure of any other condition set forth in Exhibit A) and to
the terms and conditions of this Agreement. The obligation of Sub to accept for
payment, and pay for, any Shares tendered pursuant to the Offer shall be subject
to the conditions set forth in Exhibit A (any of which may be waived by Sub in
its sole discretion, provided that, without the consent of the Company, Sub
shall not waive the Minimum Tender Condition (as defined in Exhibit A)) and to
the terms and conditions of this Agreement. Sub expressly reserves the right to
modify the terms of the Offer, except that, without the consent of the Company,
Sub shall not (i) reduce the number of Shares subject to the Offer, (ii) reduce
the price per Share to be paid pursuant to the Offer, (iii) modify or add to the
conditions set forth in Exhibit A, (iv) except as provided in the next two
sentences, extend the Offer, (v) change the form of consideration payable in the
Offer or (vi) otherwise amend the Offer in any manner materially adverse to the
Company's stockholders. Notwithstanding the foregoing, Sub may, without the
consent of the Company, (i) extend the Offer if at the scheduled expiration date
of the Offer any of the conditions to Sub's obligation to purchase Shares (as
set forth in Exhibit A) shall not be satisfied, (ii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff thereof applicable
to the Offer or for any period required by applicable law and (iii) extend the
Offer on one or more occasions for an aggregate period of not more than 10
business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence, if, on such expiration
date, the number of Shares tendered (and not withdrawn) pursuant to the Offer
represents less than 90% of the Fully Diluted Shares (as defined in Exhibit A).
Sub and Parent agree that if at any scheduled expiration date of the Offer the
HSR Condition (as defined in Exhibit A) has not been satisfied, but at such
scheduled expiration date all the other conditions set forth in Exhibit A shall
have been satisfied (other than the Minimum Tender Condition), Sub may (and at
the request of the Company (confirmed in writing) shall) extend the Offer (a
"Special Extension") from time to time until the HSR Condition has been
satisfied. In no event may the Company or Sub require that the Offer be extended
to a date later than 270 days following the date hereof by Special Extensions or
to a date later than 180 days following the date hereof for any other reason.
Subject to the terms and conditions of the Offer and this Agreement, Sub shall,
and Parent shall cause Sub to, pay for all Shares validly tendered and not
withdrawn pursuant to the Offer that Sub becomes obligated to purchase pursuant
to the Offer as promptly as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "Offer Documents"). The Offer Documents shall comply
as to form in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not 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 were made, not misleading, except
that no representation is made by Parent or Sub with respect to information
supplied by the Company for inclusion in the Offer Documents. Each of Parent,
Sub and the Company agrees promptly to amend or supplement any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
each of Parent and Sub further agrees to take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer Documents as so amended or
supplemented to be filed with the SEC and to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. Parent and Sub agree to provide the Company and its
counsel with any comments Parent, Sub or their counsel may have received from
the SEC or its staff with respect to the Offer Documents promptly after the
receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a
timely basis the funds necessary to purchase any Shares that Sub becomes
obligated to purchase pursuant to the Offer.
SECTION 1.2. Company Actions. (a) The Company hereby approves
of and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, has duly adopted resolutions
approving this Agreement, the Offer and the Merger, determining that the terms
of the Agreement, the Offer and the Merger are fair to, and in the best
interests of, the Company's stockholders and recommending that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer and
approve and adopt this Agreement and the Merger. The Company represents that its
Board of Directors has received the written opinion of ▇▇▇▇▇▇▇ & Company
International ("▇▇▇▇▇▇▇") that the proposed consideration to be received by the
holders of Shares pursuant to the Offer and in the Merger is fair to such
holders from a financial point of view, and a complete and correct copy of such
opinion has been delivered by the Company to Parent.
(b) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendations described in
paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of the
Company. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not 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 were made, not misleading, except
that no representation is made by the Company with respect to information
supplied by Parent or Sub for inclusion in the Schedule 14D-9. Each of the
Company, Parent and Sub agrees promptly to amend or supplement any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by applicable Federal securities laws. Parent
and its counsel shall be given a reasonable opportunity to review and comment on
the Schedule 14D-9 and all amendments and supplements thereto prior to their
filing with the SEC or dissemination to stockholders of the Company. The Company
agrees to provide Parent and its counsel in writing with any comments the
Company or its counsel may have received from the SEC or its staff with respect
to the Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Shares as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Shares, in each case true and correct as of the most recent
practicable date, and shall furnish to Sub such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Parent may reasonably request in communicating the Offer to
the Company's stockholders. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Merger, Parent and Sub shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will, upon request, deliver
to the Company all copies of such information then in their possession or
control.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the
conditions hereof and in accordance with the Delaware General Corporation Law
(the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time of the Merger (as hereinafter defined). Following the Merger, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub and the Company in accordance with
the DGCL.
SECTION 2.2. Effective Time. As soon as practicable following
the satisfaction or waiver of the conditions to the Merger, the parties shall
file a certificate of merger or other appropriate documents (in any such case,
the "Certificate of Merger") executed in accordance with the relevant provisions
of the DGCL. The Merger shall become effective at such time as the Certificate
of Merger is duly filed with the Delaware Secretary of State, or at such other
time as Sub and the Company shall agree should be specified in the Certificate
of Merger (the time the Merger becomes effective being the "Effective Time of
the Merger").
SECTION 2.3. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 2.4. Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of Sub, as in effect at the Effective Time of the
Merger, shall be the Certificate 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 at the Effective Time of
the Merger shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
SECTION 2.5. Directors. The directors of Sub at the Effective
Time of the Merger shall be the directors of the Surviving Corporation and shall
hold office until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified in accordance with
applicable law, as the case may be.
SECTION 2.6. Officers. The officers of the Company at the
Effective Time of the Merger shall be the officers of the Surviving Corporation
and shall hold office until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, in accordance with
applicable law, as the case may be.
SECTION 2.7. Effect on Capital Stock. As of the Effective
Time of the Merger, by virtue of the Merger and without any action on the part
of the holder of any Shares:
(a) Capital Stock of Sub. Subject to Section 2.7(b) below,
each issued and outstanding share of the capital stock of Sub shall be
converted into and become one fully paid and nonassessable share of
Common Stock, par value $1.00 per share, of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted
and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. All
Shares that are owned directly or indirectly by the Company as treasury
stock or by any wholly owned subsidiary of the Company and any Shares
owned by Parent, Sub or any other wholly owned subsidiary of Parent
shall be canceled, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Shares. Subject to Section 2.7(d), each
issued and outstanding Share (other than Shares to be canceled in
accordance with Section 2.7(b)) shall be converted into the right to
receive from the Surviving Corporation in cash, without interest, the
price per Share paid pursuant to the Offer (the "Merger
Consideration").
(d) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding
Shares held by a Dissenting Stockholder shall not be converted as
described in Section 2.7(c) but shall become the right to receive such
consideration as may be determined to be due to such Dissenting
Stockholder pursuant to the DGCL; provided, however, that Shares
outstanding immediately prior to the Effective Time of the Merger and
held by a Dissenting Stockholder who shall, after the Effective Time of
the Merger, withdraw his demand for appraisal or lose his right of
appraisal, in either case pursuant to the DGCL, shall be deemed to be
converted, as of the Effective Time of the Merger, into the right to
receive the Merger Consideration. The Company shall give Parent (i)
prompt notice of any written demands for appraisal of Shares received
by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to any such demands. The Company shall not,
without the prior written consent of Parent, make any payment with
respect to, or settle, offer to settle or otherwise negotiate, any such
demands.
SECTION 2.8. Exchange of Certificates. (a) Paying Agent. Prior
to the Effective Time of the Merger, Parent shall select a bank or trust company
to act as paying agent (the "Paying Agent") for the payment of the Merger
Consideration upon surrender of certificates representing Shares.
(b) Parent to Provide Funds. Parent shall take all steps
necessary to enable and cause the Surviving Corporation to provide the Paying
Agent on a timely basis, as and when needed after the Effective Time of the
Merger, funds necessary to pay for the Shares pursuant to Section 2.7.
(c) Exchange Procedure. Promptly after the Effective Time of
the Merger, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time of the
Merger represented outstanding Shares (the "Certificates"), other than the
Company, Parent and any subsidiary of the Company or Parent, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and which shall be in a form and have such
other provisions as Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by the Surviving
Corporation, together with such letter of transmittal, duly executed, and such
other documents as may reasonably be required by the Paying Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration into which the Shares theretofore represented by such Certificate
shall have been converted pursuant to Section 2.7, and the Certificate so
surrendered shall forthwith be canceled. No interest will be paid or will accrue
on the Merger Consideration payable upon the surrender of any Certificate. If
payment is to be made to a person other than the person in whose name the
Certificate so surrendered is registered, it shall be a condition of payment
that such Certificate shall be properly endorsed or otherwise in proper form for
transfer and that the person requesting such payment shall pay to the Paying
Agent any transfer or other taxes required by reason of the payment to a person
other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.8, each
Certificate shall be deemed at any time after the Effective Time of the Merger
to represent only the right to receive upon such surrender the Merger
Consideration, without interest, into which the Shares theretofore represented
by such Certificate shall have been converted pursuant to Section 2.7(c). Any
portion of the Merger Consideration made available to the Paying Agent pursuant
to Section 2.8(b) (and any interest or other income earned thereon) that remains
unclaimed by the holders of Shares six months after the Effective Time of the
Merger shall be returned to Parent, upon demand, and any such holder who has not
exchanged them for the Merger Consideration in accordance with this Section
prior to that time shall thereafter look only to Parent for payment of the
Merger Consideration in respect of such Shares without any interest thereon.
Notwithstanding the foregoing, neither the Paying Agent nor any party shall be
liable to a former stockholder of the Company for any cash or interest delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws. If any Certificates shall not have been surrendered prior to seven
years after the Effective Time of the Merger (or immediately prior to such
earlier date on which any payment pursuant to this Section 2.8 would otherwise
escheat to or become the property of any governmental body or agency) the
payment in respect of such Certificate 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.
(d) No Further Ownership Rights in Shares. All Merger
Consideration 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 theretofore represented by such
Certificates and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Shares that were out-
standing immediately prior to the Effective Time of the Merger. If, after the
Effective Time of the Merger, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article II.
SECTION 2.9. Withholding Rights. Each of the Surviving
Corporation and Parent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable to any person pursuant to this Article such
amounts as it is required to deduct and withhold with respect to the making of
such payment under any provision of federal, state, local or foreign tax law. If
the Surviving Corporation or Parent, as the case may be, so withholds amounts,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the Shares in respect of which the Surviving Corporation
or Parent, as the case may be, made such deduction and withholding.
SECTION 2.10. Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with, Parent and Sub as
follows, subject to any exceptions specified in the Company Disclosure Document
in the form attached hereto as Schedule I:
(a) Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the law
of the jurisdiction in which it is incorporated and has the requisite corporate
power and governmental licenses, authorizations, permits, consents and approvals
(except where the failure to have such licenses, authorizations, permits,
consents and approvals, individually or in the aggregate, would not have a
material adverse effect on the Company and its subsidiaries taken as a whole) to
carry on its business as now being conducted. The Company is duly qualified to
do business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the failure to
be so qualified to do business or in good standing (individually or in the
aggregate) would not have a material adverse effect (as defined in Section 9.3)
on the Company and its subsidiaries, taken as a whole.
(b) Subsidiaries. The Company's subsidiaries that are
corporations are corporations duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation and
have the requisite corporate power and authority to carry on their respective
businesses as they are now being conducted and to own, operate and lease the
assets they now own, operate or hold under lease. The Company's subsidiaries are
duly qualified to do business and are in good standing in each jurisdiction in
which the nature of their respective businesses or the ownership or leasing of
their respective properties makes such qualification necessary, other than in
such jurisdictions where the failure to be so qualified or in good standing
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole. All subsidiaries of the Company and their respective
jurisdictions of incorporation are identified in the Company 10-K. All the
outstanding shares of capital stock of the Company's subsidiaries that are
corporations have been duly authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any preemptive rights or
other preferential rights of subscription or purchase of any person. Except as
disclosed in the SEC Documents (as defined in Section 3.1(e)) filed on or prior
to the date hereof, all such stock and ownership interests are owned of record
and beneficially by the Company or by a wholly owned subsidiary of the Company,
free and clear of all liens, pledges, security interests, charges, claims and
other encumbrances of any kind or nature ("Liens"). Except for the capital stock
of, or ownership interests in, its subsidiaries, the Company does not own,
directly or indirectly, any capital stock, equity interest or other ownership
interest in any corporation, partnership, association, joint venture, limited
liability company or other entity.
(c) Capital Structure. The authorized capital stock of the
Company consists of 40,000,000 shares of common stock, $1.25 par value ("Company
Common Stock"), and 1,000,000 shares of preferred stock, $1 par value
("Preferred Stock"), of which 150,000 shares have been designated Series A
Junior Participating Preferred Stock and reserved for issuance pursuant to the
Rights Agreement dated May 31, 1990 (as amended) between the Company and
Equiserve Trust Company, N.A., as rights agent (the "Company Rights Agreement").
At the close of business on May 11, 1999, (i) 19,482,588 Shares were issued and
outstanding; (ii) 10,000, 10,956, 20,000 and 18,368 shares were reserved for
issuance pursuant to options not yet granted under the Company's 1997
Non-Employee Directors' Stock Option Plan, 1997 Stock Option Plan, 1995
Non-Employee Directors' Stock Plan and 1977 Stock Option Plan, respectively,
(iii) 9,416 Shares were reserved for issuance under the Company's Stock Award
Plan, (iv) 110,000, 716,857, 135,000, 33,000, 567,543, 385,468 and 10,000 Shares
were reserved for issuance pursuant to outstanding options granted under the
Company's 1997 Non-Employee Director Stock Option Plan, 1997 Stock Option Plan,
1995 Non-Employee Directors' Stock Option Plan, 1981 Stock Option Plan, 1977
Stock Option Plan, options assumed in connection with the acquisition of ▇▇▇▇▇▇
Corporation and a stock option agreement with a director of the Company and (v)
75,000 Shares were reserved for issuance pursuant to stock options granted in
connection with the acquisition of Hytork International Plc. Except as set forth
above, no shares of capital stock or other equity or voting securities of the
Company are reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all such shares issuable upon the exercise
of stock options will be when issued thereunder, validly issued, fully paid and
nonassessable and not subject to preemptive rights. No capital stock has been
issued by the Company since May 11, 1999, other than Shares issued pursuant to
options, referred to in (iv) and (v) above, outstanding on or prior to such
date in accordance with their terms at such date. Except for options referred
to in (iv) and (v) above, there are no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights, agreements,
arrangements or undertakings of any kind to which the Company or any of its
subsidiaries is a party, or by which any of them is bound, obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, any shares of capital stock or other equity or voting
securities of, or other ownership interests in, the Company or of any of its
subsidiaries or obligating the Company or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking.
(d) Authority; Non-contravention. The Company has the
requisite corporate power and authority to enter into this Agreement and,
subject to Company Stockholder Approval (as defined in Section 3.1(h)), to
consummate the transactions contemplated hereby and to take such actions, if
any, as shall have been taken with respect to the matters referred to in Section
3.1(h). The execution, delivery and performance of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company, subject to Company Stockholder Approval. This Agreement has been duly
and validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws or judicial
decisions now or hereafter in effect relating to creditors' rights generally and
(ii) the remedy of specific performance and injunctive relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution, delivery and performance of
this Agreement by the Company do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any of its subsidiaries under, any provision of (i) the Certificate
of Incorporation or By-laws of the Company or any provision of the comparable
organizational documents of its subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease, or other agreement, instrument, permit,
concession, franchise or license applicable to the Company or any of its
subsidiaries or their respective properties or assets or (iii) subject to
governmental filing and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation or
arbitration award applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clause (ii), any
such conflicts, violations, defaults, rights or liens, security interests,
charges or encumbrances that individually or in the aggregate would not have a
material adverse effect on the Company or would not materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or agency, domestic or foreign, including local authorities (a
"Governmental Entity"), is required by or with respect to the Company or any of
its subsidiaries in connection with the execution, delivery and performance of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (i) the filing of a premerger
notification and report form by the Company under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any required
filings or approvals under applicable foreign antitrust laws and regulations,
(ii) the filing with the Securities and Exchange Commission (the "SEC") of (A)
a proxy statement relating to the Company Stockholder Approval (such proxy
statement as amended or supplemented from time to time, the "Proxy Statement")
and (B) the Schedule 14D-9; and (C) such reports under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
filed in connection with this Agreement and the transactions contemplated
hereby, and (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State with respect to the Merger as provided in the DGCL and
appropriate documents with the relevant authorities of other jurisdictions in
which the Company is qualified to do business and such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not have a material adverse
effect on the Company.
(e) SEC Documents. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC since January 1,
1996 (such documents, together with all exhibits and schedules thereto and
documents incorporated by reference therein, collectively referred to herein as
the "SEC Documents"). No subsidiary of the Company is required to file any
reports, schedules, forms, statements or other documents with the SEC. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the rules and regulations of
the SEC promulgated thereunder applicable to such SEC Documents, and none of
such 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. The consolidated financial statements of the Company
included in the SEC Documents comply in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
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 and other adjustments
described therein).
(f) Information Supplied. (i) None of the information supplied
or to be supplied by the Company or its subsidiaries for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Information Statement referred to in Section 5.9 will, at the time they are
filed with the SEC, at any time they are amended or supplemented, at the time of
any distribution or dissemination thereof and at the time of the consummation of
the Offer, 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 not misleading; and (ii) the Proxy Statement will not, at the date the
Proxy Statement is first mailed to the Company's stockholders, at the time of
the Company Stockholders Meeting and at the Effective Time of the Merger, and
each document required to be filed by the Company with the SEC or required to be
distributed or otherwise disseminated to the Company's stockholders in
connection with the transactions contemplated by this Agreement (the "Company
Disclosure Documents") will not, 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. The Proxy Statement, as it relates to the Company
Stockholders Meeting, and the Company Disclosure Documents, when filed,
distributed or disseminated, as applicable, will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty contained in
this Section 3.1(f)(ii) is made by the Company with respect to statements made
or incorporated by reference in the Company Disclosure Documents based on
information supplied by Parent or Sub for inclusion or incorporation by
reference therein.
(g) Absence of Certain Changes or Events. Except as disclosed
in the SEC Documents filed on or prior to the date hereof, since December 31,
1998, the Company has conducted its business only in the ordinary course
consistent with past practice, and there has not been (i) any material adverse
change with respect to the Company, (ii) any declaration, setting aside or
payment of any dividend (whether in cash, stock or property) with respect to any
of the Company's capital stock other than the regular quarterly dividends on
Shares in the amount of $.045 per Share (the "Company's regular dividend"),
(iii) (A) any granting by the Company or any of its subsidiaries to any officer,
director or employee of the Company or any of its subsidiaries of any increase
in compensation, bonus or other benefits, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of December 31, 1998, (B) any granting by the Company or
any of its subsidiaries to any such officer, director or employee of, or any
increase in, severance or termination pay, except as was required under
employment, severance or termination agreements in effect as of December 31,
1998, or any amendment to any existing arrangement with such officer, director
or employee, (C) except in accordance with past practice as to officers,
directors or employees of the Company or any of its subsidiaries, any entry by
the Company or any of its subsidiaries into any employment, deferred
compensation, severance, termination or other similar agreement (or any
amendment to such existing agreement) with any such officer, director or
employee, or (D) any establishment, adoption or amendment (except as required by
applicable law) of any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the Company or any of its subsidiaries, (iv) any
damage, destruction or loss, whether or not covered by insurance, affecting the
business or assets of the Company or any of its subsidiaries that has or
reasonably could be expected to have a material adverse effect on the Company,
(v) any change in accounting methods, principles or practices or any change in
any method of tax accounting by the Company materially affecting the assets,
liabilities or business of the Company and its subsidiaries, taken as a whole,
except insofar as may have been required by a change in generally accepted
accounting principles, or (vi) any event which, if it had taken place following
the execution of this Agreement, would not have been permitted by Section 4.1.
(h) State Takeover Statutes; Absence of Supermajority
Provision. The Company has taken all action to assure that no state takeover
statute or similar statute or regulation, including, without limitation ss.203
of the DGCL, shall apply to the Offer or the Merger or any of the other
transactions contemplated hereby. Except for the approval of the Merger by the
holders of two-thirds of the outstanding Shares ("Company Stockholder
Approval"), no other stockholder action on the part of the Company is required
for approval of the Merger and the transactions contemplated hereby. The Company
has taken all action necessary to (i) render the rights issued pursuant to the
terms of the Company Rights Agreement inapplicable to the Offer, the Merger,
this Agreement and the transactions contemplated hereby and (ii) ensure that (A)
neither Parent, Sub nor any of their affiliates is an Acquiring Person (as
defined in the Company Rights Agreement) and (B) no Distribution Date (as
defined in the Company's Rights Agreement dated May 31, 1990, as amended and
supplemented to the date hereof (the "Company Rights Agreement")) shall occur by
reason of the approval or execution of this Agreement, the announcement or
consummation of the Offer or Merger or the consummation of any of the other
transactions contemplated hereby.
(i) Brokers. Except for ▇▇▇▇▇▇▇, which has rendered the
opinion referred to in Section 1.2 and whose fees are to be paid by the Company,
no broker, investment banker or other person is entitled to receive from the
Company or any of its subsidiaries any investment banking, brokerage or finder's
fees in connection with this Agreement or the transactions contemplated hereby,
including any fee for any opinion rendered by any investment banker. The
engagement letter between the Company and ▇▇▇▇▇▇▇ provided to Parent on or prior
to the date of this Agreement constitutes the entire understanding of the
Company and ▇▇▇▇▇▇▇ with respect to the matters referred to therein, and has not
been amended or modified, nor will it be amended or modified prior to the
Effective Time of the Merger.
(j) Litigation. Except as disclosed in the SEC Documents filed
on or prior to the date hereof, there is no suit, action, proceeding or
investigation (or any basis therefor as to which the Company has knowledge)
pending or, to the best of the Company's knowledge, threatened against or
affecting the Company or any of its subsidiaries (or any present or former
officer, director or employee of the Company or any of its subsidiaries or any
other person, in each case for whom the Company or any of such subsidiaries may
be liable) before any court or arbitrator or before or by any governmental body,
agency or official, domestic or foreign, as of the date hereof and after the
date hereof there will be no such suits, actions, proceedings or investigations
or any such bases that could reasonably be expected to have a material adverse
effect on the Company or prevent, hinder or materially delay the ability of the
Company to consummate the transactions contemplated by this Agreement; nor is
there any judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator outstanding against the Company or any of its subsidiaries having,
or which, insofar as reasonably can be foreseen, in the future could have, any
such effect.
(k) Employee Benefit Matters. As used in this Section 3.1(l),
the term "Employer" shall mean the Company as defined in the preamble of this
Agreement and any member of a controlled group or affiliated service group, as
defined in sections 414(b), (c), (m) and (o) of the Internal Revenue Code of
1986, as amended ("Code") of which the Company is a member.
(i) Except for the terminated ▇▇▇▇▇▇ Valve Company Pension
Plan and Trust, all liabilities (including administrative
responsibilities) with respect to which were retained by Shiloh
Industries, Inc., with respect to each employee welfare benefit plan,
employee pension benefit plan and employee benefit plan as defined in
sections 3(1), 3(2), and 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which have been or are
sponsored by, participated in, or contributed to by the Employer at any
time during the three-year period ending on the date of this Agreement,
or with respect to which the Employer may have any liability, and
except for any matter that would not individually or in the aggregate
have a material adverse effect on the Company, to the extent
applicable: (A) the plan is in substantial compliance with the Code and
ERISA, including all reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA; (B) the appropriate Form 5500 has been
timely filed for each year of its existence; (C) there has been no
transaction described in section 406 or section 407 of ERISA or section
4975 of the Code unless exempt under section 408 of ERISA or section
4975 of the Code, as applicable; (D) the bonding requirements of
section 412 of ERISA have been satisfied; (E) there is no issue pending
nor any issue resolved adversely to the Employer which may subject the
Company to the payment of a penalty, interest, tax or other amount, (F)
the plan can be unilaterally terminated or amended on no more than 90
days notice; (G) all contributions or other amounts payable by the
Employer as of the Effective Time of the Merger with respect to the
plan have either been paid or accrued in the Employer's most recent
financial statements included in the SEC Documents and (H) no notice
has been received by the Employer of an increase or proposed increase
in the cost of any such plan or any other employee benefit agreement or
arrangement, including deferred compensation plans, incentive plans,
bonus plans or arrangements, stock option plans, stock purchase plans,
golden parachute agreements, severance pay plans or agreements,
dependent care plans, cafeteria plans, employee assistance programs,
scholarship programs, employment contracts and other similar plans,
agreements and arrangements that are currently in effect or were
maintained within three years of the date hereof, or have been approved
before this date but are not yet effective, for the benefit of
directors, officers or employees, or former directors, officers or
employees (or their beneficiaries) of the Employer (each, a "Company
Benefit Plan"). There are no pending or, to the Company's knowledge,
threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any Company Benefit Plan or
their related trusts. A complete list of all material Company Benefit
Plans that are currently in existence, or with respect to which the
Company or any of its subsidiaries may have any liability (other than
Foreign Plans, as defined below) is set forth in Schedule I. Copies of
all Company Benefit Plans have been furnished or made available to
Parent.
(ii) Except for the terminated ▇▇▇▇▇▇ Valve Company Pension
Plan and Trust, all liabilities (including administrative
responsibilities) with respect to which were retained by Shiloh
Industries, Inc., neither the Company nor any entity (whether or not
incorporated) that was at any time during the six years before the date
of this Agreement treated as a single employer together with the
Company under section 414 of the Code has ever maintained, had any
obligation to contribute to or incurred any liability with respect to a
pension plan that is or was subject to the provisions of Title IV of
ERISA or section 412 of the Code. Neither the Company nor any entity
(whether or not incorporated) that was at any time during the six years
before the date of this Agreement treated as a single employer together
with the Company under section 414 of the Code has ever maintained, had
an obligation to contribute to, or incurred any liability with respect
to a multiemployer pension plan as defined in section 3(37) of ERISA.
During the last six years, the Company has not maintained, had an
obligation to contribute to or incurred any liability with respect to a
voluntary employees beneficiary association that is or was intended to
satisfy the requirements of section 501(c)(9) of the Code. No plan,
arrangement or agreement with any one or more employees will cause the
Employer to have liability for severance pay as a result of the Merger,
except as otherwise set forth in the Change-in-Control Agreements and
Severance Agreements between the Company and each of the persons named
on Schedule II hereto (the "Severance Agreements"). The Employer does
not provide employee benefits, including without limitation, death,
post-retirement medical or health coverage (whether or not insured) or
contribute to or maintain any employee benefit plan which provides for
benefit coverage following termination of employment except (A) as is
required by section 4980B(f) of the Code or other applicable statute,
(B) death benefits or retirement benefits under any employee pension
benefit plan as defined in section 3(2) of ERISA, (C) benefits the full
cost of which is borne by the current or former employee (or his
beneficiary), nor has it made any representations, agreements,
covenants or commitments to provide that coverage, or (D) deferred
compensation benefits which have been accrued as liabilities on the
books of the Employer and disclosed on its financial statements
included in the SEC Documents. All group health plans maintained by the
Employer have been operated in material compliance with section
4980B(f) of the Code.
(iii) All Company Benefit Plans that are intended to qualify
under section 401(a) of the Code have been submitted to and approved as
qualifying under section 401(a) of the Code by the Internal Revenue
Service ("IRS") or the applicable remedial amendment period will not
have ended prior to the Effective Time of the Merger. Except for the
terminated ▇▇▇▇▇▇ Valve Company Pension Plan and Trust, all
liabilities (including administrative responsibilities) with respect to
which were retained by Shiloh Industries, Inc., the Company knows of no
fact or circumstance giving rise to a material likelihood that any such
Company Benefit Plan would not be treated as qualified by the IRS.
(iv) Except as expressly provided in this Agreement or the
Severance Agreements and except pursuant to certain options described
in section 3.1(c), the transactions contemplated by this Agreement will
not accelerate the time of payment or vesting, or increase the amount,
of compensation due any director, officer or employee or former
director, officer or employee (including any beneficiary) from the
Company.
(v) Schedule I separately identifies each material Company
Benefit Plan that is primarily intended to benefit individuals whose
principal place of employment is located outside the United States
(each, a "Foreign Plan"). With respect to each Foreign Plan, the
Company has either made available to Parent a copy of the Foreign Plan
or there are no material liabilities associated with the Foreign Plan
that are not disclosed on the SEC Documents. Each Foreign Plan has been
maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders,
rules and regulations (including any special provisions that the Plan
was intended to so satisfy) and has been maintained in good standing
with applicable regulatory authorities.
(l) Taxes. Each of the Company and each of its subsidiaries,
and any consolidated, combined, unitary or aggregate group for Tax (as defined
below) purposes of which the Company or any of its subsidiaries is or has been a
member, has timely filed all Tax Returns (as defined below) required to be filed
by it on or before the Effective Time of the Merger and has timely paid or
deposited (or the Company has paid or deposited on its behalf) all Taxes which
are required to be paid or deposited on or before the Effective Time of the
Merger. Each of the Tax Returns filed by the Company or any of its subsidiaries
is accurate and complete in all material respects. The most recent consolidated
financial statements of the Company contained in the filed SEC Documents reflect
an adequate reserve for all Taxes payable by the Company and its subsidiaries
for all taxable periods and portions thereof through the date of such financial
statements. The books and records of the Company and its subsidiaries reflect
adequate reserves for Taxes. No deficiencies for any Taxes have been proposed,
asserted or assessed against the Company or any of its subsidiaries. No
unexpired requests for waivers of the time to assess any Taxes have been granted
or are pending and there are no tax liens upon any assets of the Company or any
of its subsidiaries other than liens for Taxes which are not yet delinquent. The
Federal income Tax Returns of the Company and its subsidiaries consolidated in
such Tax Returns have been examined by and settled with the IRS through the year
ended September 30, 1990. There are no current examinations of any Tax Return of
the Company or any of its subsidiaries being conducted. There are no settlements
of any prior examinations that could reasonably be expected to adversely affect
any taxable period for which the statute of limitations has not run or have not
been paid in full. Since January 1, 1995, neither the Company nor any of its
subsidiaries has been a member of an affiliated, consolidated, combined or
unitary group other than one of which the Company was the common parent. Neither
the Company nor any of its subsidiaries has any obligation under any Tax sharing
agreement, Tax allocation agreement, Tax indemnification agreement or any other
agreement or arrangement pursuant to which the Company or any subsidiary is or
might be required to make any payment in respect of any Tax of any person
(other than the Company or any of its subsidiaries). Neither the Company nor any
of its subsidiaries has entered into any agreement or arrangement with any
governmental authority with regard to liabilities for Taxes other than
settlements or compromises with respect to asserted Tax liabilities for prior
taxable years. There are no requests for rulings or determinations in respect
of any tax or tax asset pending between the Company or any subsidiary and any
taxing authority. Neither the Company nor any subsidiary will be required to
include any adjustment in taxable income for any post-closing tax period under
Section 481(c) of the Code (or any similar provision of the tax laws of any
jurisdiction) as a result of a change in method of accounting for a pre-closing
tax period or pursuant to the provisions of any agreement entered into with any
taxing authority with regard to the Tax liability of the Company or any
subsidiary for any pre-closing tax period that has continuing effect. Other
than the acquisition of ▇▇▇▇▇▇ Corporation, since January 1, 1995, neither the
Company nor any of its subsidiaries is a party to a transaction intended to be
treated as a reorganization under Section 368 or a distribution under Section
355 of the Code. As used herein, "Tax" or "Taxes" shall mean all taxes of any
kind, including, without limitation, those on or measured by or referred to as
income, gross receipts, unemployment, sales, use, ad valorem, franchise,
capital, earned surplus, profits, license, withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, value added, property
or windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any Governmental Entity,
domestic or foreign. As used herein, "Tax Return" shall mean any return, report,
statement or information required to be filed with any governmental authority
with respect to Taxes.
(m) No Excess Parachute Payments. Except with respect to
remuneration that could be received by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ under his deferred
compensation arrangement relating to Shares granted under the Company's Stock
Award Plan, and his change in control agreement, and in connection with the
acceleration of any unvested options, any amount that could be received (whether
in cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of the Company or any of its affiliates who is a "disqualified individual" (as
such term is defined in proposed Treasury Regulation section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement
or Company Benefit Plan currently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in section 280G(b)(1) of the
Code).
(n) Environmental Matters. Except as would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, (i) the
business operations of the Company and its subsidiaries have been and are being
conducted in compliance with all limitations, restrictions, standards and
requirements established under Environmental Laws, (ii) no facts or
circumstances exist that impose or could reasonably be expected to impose on the
Company or any of its subsidiaries an obligation under Environmental Laws to
conduct any removal, remediation, or similar response action, or to pay any
fines, penalties or other expenses, (iii) there is no obligation, undertaking
or liability arising out of or relating to Environmental Laws that the Company
or any of its subsidiaries has agreed to, assumed or retained, by contract or
otherwise, or that has been or could reasonably be expected to be imposed on the
Company or any of its subsidiaries by any Environmental Law, writ, injunction,
decree, order or judgment, and (iv) there are no lawsuits, claims or proceedings
and no notice, notification, demand, request for information, citations,
summons, complaint or order has been received by, or, to the knowledge of the
Company or any of its subsidiaries, is threatened or pending against the Company
or any of its subsidiaries that arise out of or relate to Environmental Laws.
There has been no environmental investigation, study, audit, test, review or
other analysis conducted by or on behalf of or in the possession of the Company
or any of its subsidiaries that discusses, reveals, or discloses any material
liabilities (whether accrued, absolute, contingent or otherwise) in relation to
the current or prior business of the Company or any of its subsidiaries or any
property or facility now or previously owned, leased or operated by the Company
or any of its subsidiaries which has not been delivered to Parent at least five
days prior to the date hereof. Neither the Company nor any of its subsidiaries
owns or leases or, to the Company's knowledge, has owned or leased any real
property in New Jersey or Connecticut.
For purposes of this section 3.1(n), "Environmental Laws" means any applicable
federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, licenses, agreements or governmental restrictions relating
to human health, the environment or to the use, manufacture, treatment, storage,
transport, clean-up or other remediation of pollutants, contaminants or other
hazardous substances or wastes or to the emissions, discharges or releases of
pollutants, contaminants or other hazardous substances or wastes into the
environment.
(o) Compliance with Laws. The Company and its subsidiaries
hold all required, necessary or applicable permits, licenses, variances,
exemptions, orders, franchises and approvals of all Governmental Entities,
except where the failure to so hold would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole (the "Company Permits"). The
Company and its subsidiaries are in compliance with the terms of the Company
Permits except where the failure to so comply would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Neither the
Company nor any of its subsidiaries has violated or failed to comply with any
statute, law, ordinance, regulation, rule, permit or order of any Federal, state
or local government, domestic or foreign, or any Governmental Entity, any
arbitration award or any judgment, decree or order of any court or other
Governmental Entity, applicable to the Company or any of its subsidiaries or
their respective business, assets or operations, except for violations and
failures to comply that could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) Material Contracts and Agreements. All material contracts
of the Company or its subsidiaries have been included in the SEC Documents filed
on or prior to the date hereof, except for those contracts not required to be
filed pursuant to the rules and regulations of the SEC. Neither the Company nor
any subsidiary is a party to any joint venture agreement or agreement to form
any joint venture nor does the Company or any of its subsidiaries have any
liability if it fails to pursue any contemplated joint ventures.
(q) Title to Properties.
(i) Each of the Company and each of its subsidiaries has good
and defensible title to, or valid leasehold interests in, all its
material assets and properties purported to be owned by it in the SEC
Documents, except for such as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the ordinary
course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in
the aggregate, do not and will not materially interfere with its
ability to conduct its business as currently conducted or as reasonably
expected to be conducted. All such assets and properties, other than
assets and properties in which the Company or any of the subsidiaries
has leasehold interests, are free and clear of all Liens, other than
those set forth in the SEC Documents filed on or prior to the date
hereof, and except for Liens, that, in the aggregate, do not and will
not materially interfere with the ability of the Company or any of its
subsidiaries to conduct business as currently conducted or as
reasonably expected to be conducted.
(ii) Except as would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, each of the Company and
each of its subsidiaries has complied in all material respects with the
terms of all leases to which it is a party and under which it is in
occupancy, and all such leases are in full force and effect. Each of
the Company and each of its subsidiaries enjoys peaceful and
undisturbed possession under all such leases.
(r) Intellectual Property. The Company and its subsidiaries
own, or are licensed or otherwise have the right to use, all Intellectual
Property that is material to the condition (financial or otherwise) or conduct
of the business and operations of the Company and its subsidiaries taken as a
whole. The Company and its subsidiaries have not infringed or misappropriated
and do not infringe or misappropriate any item of Intellectual Property of any
person, except for infringement or misappropriation that could not, in the
aggregate, have a material adverse effect with respect to the Company and its
subsidiaries, taken as a whole. No person has infringed or misappropriated, or
is infringing or misappropriating, any item of Intellectual Property that is
owned by or licensed to the Company or its subsidiaries, except for infringement
or misappropriation that could not have a material adverse effect with respect
to the Company and its subsidiaries taken as a whole. There are no pending or,
to the knowledge of the Company, threatened claims relating to infringement,
misappropriation, unenforceability, invalidity, misuse, ownership, right to use,
or other violation asserted by or against the Company or its subsidiaries
relating to any item of Intellectual Property. For purposes of this Section
3.1(r), "Intellectual Property" means domestic and foreign patents, trademarks,
service marks, trade names, copyrights, trade secrets, know-how, utility models,
mask works, rights in inventions, discoveries, processes, formulae, and
registrations and applications for any of the foregoing, and any other
intellectual property and proprietary information, including rights in software,
firmware, computer programs and data.
(s) Labor Matters. There are no collective bargaining
agreements or other labor union agreements or understandings to which the
Company or any of its subsidiaries is a party or by which any of them is bound,
nor is it or any of its subsidiaries the subject of any proceeding asserting
that it or any subsidiary has committed an unfair labor practice or seeking to
compel it to bargain with any labor organization as to wages or conditions. To
the Company's knowledge, since December 31, 1997, neither the Company nor any of
its subsidiaries has encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts.
(t) Undisclosed Liabilities. Except as set forth in the SEC
Documents filed on or prior to the date hereof, at the date of the most recent
audited financial statements of the Company included in such SEC Documents,
neither the Company nor any of its subsidiaries had, and since such date neither
the Company nor any of such subsidiaries has incurred, any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise
other than those attributable to purchase orders issued, accounts payable
incurred or contracts entered into with customers in each case in the ordinary
course of the Company's business consistent with past practices), and there is
no existing condition, situation or set of circumstances that could reasonably
be expected to result in such a liability or obligation, which liabilities or
obligations in all such cases, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(u) Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has by vote of those directors
present (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger and the transactions contemplated
thereby, are fair to and in the best interests of the stockholders of the
Company, and (ii) resolved to recommend to the holders of the Shares that they
tender their Shares pursuant to the Offer and/or approve the Merger and the
transactions contemplated thereby.
SECTION 3.2. Representations and Warranties of Parent and
Sub. Parent and Sub represent and warrant to, and agree with, the Company
as follows:
(a) Organization; Standing and Power. Parent and Sub are
corporations duly organized, validly existing and in good standing under laws of
their states of incorporation and have the requisite corporate power and
governmental licenses, authorizations, permits, consents and approvals (except
where the failure to have such licenses, authorizations, permits, consents and
approvals, individually or in the aggregate, would not have a material adverse
effect on Parent and its subsidiaries taken as a whole) to carry on their
business as now being conducted. Parent and Sub are duly qualified to do
business and in good standing in each jurisdiction in which the nature of their
business or the ownership or leasing of their properties makes such
qualification necessary, other than in such jurisdictions where the failure to
be so qualified to do business (individually or in the aggregate) would not have
a material adverse effect on Parent and its subsidiaries, taken as a whole.
(b) Authority; Non-contravention. Parent and Sub have the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Sub and the consummation by Parent
and Sub of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and Sub. This Agreement has
been duly executed and delivered by Parent and Sub and constitutes a valid and
binding obligation of Parent and Sub, enforceable against Parent and Sub in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
judicial decisions now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. The execution, delivery and performance
of this Agreement by Parent and Sub do not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any obligation or
to loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent or Sub or any of their subsidiaries under, any provision of (i) the
Certificate of Incorporation or By-laws of Sub or of Parent or any comparable
organizational documents of their subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or Sub
or any of their subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation or arbitration account applicable to Parent or Sub or any of their
subsidiaries or their respective properties or assets, other than, in the case
of clause (ii), any such conflicts, violations or defaults that individually or
in the aggregate would not be reasonably expected to have, individually or in
the aggregate, a material adverse effect on Parent or materially impair the
ability of Parent and Sub to perform their respective obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Parent or
Sub or any of their subsidiaries in connection with the execution, delivery and
performance of this Agreement by Parent and Sub or the consummation by Parent
and Sub of the transactions contemplated hereby, except for (i) the filing by
Parent of a premerger notification and report form under the HSR Act and any
filings or approvals required under applicable foreign antitrust laws and
regulations, (ii) the filing with the SEC of the Offer Documents and such
reports under Sections 13 and 16 of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby and
(iii) filings in Delaware by Sub in connection with the Merger.
(c) Information Supplied. None of the information supplied or
to be supplied by Parent in writing for inclusion or incorporation by reference
in (i) the Offer Documents, the Schedule 14D-9, the Information Statement
referred to in Section 5.9, or the Proxy Statement will, in the case of the
Offer Documents and the Schedule 14D-9 and the Information Statement at the
respective times they are filed with the SEC or first published, sent or given
to the Company's stockholders, and at any time they are amended or supplemented,
or in the case of the Proxy Statement at the date the Proxy Statement is first
mailed to the Company's stockholders and at the time of the Company Stockholders
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.
(d) Brokers. No broker, investment banker or other person, is
entitled to any broker's, finder's or other similar fee or commission from the
Company or any of its subsidiaries in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub, including any fee for any opinion rendered by any investment
banker, and the Company shall have no liability for any fees to any such broker,
investment banker or other person.
(e) Litigation. There is no suit, action, proceeding or
investigation pending or, to the knowledge of Parent, threatened against or
affecting Parent or any of its subsidiaries that could reasonably be expected to
prevent, hinder or materially delay the ability of Parent to consummate the
transactions contemplated by this Agreement, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Parent or any of its subsidiaries having, or which, insofar as
reasonably can be foreseen, in the future could have, any such effect.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business of the Company.
(a) Ordinary Course. During the period from the date of this
Agreement to the Effective Time of the Merger (except as otherwise specifically
contemplated by the terms of this Agreement or as described in the Company
Disclosure Document), the Company shall and shall cause its subsidiaries to
carry on their respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them, in each case consistent with past practice, to the end that
their goodwill and ongoing businesses shall be unimpaired to the fullest extent
possible at the Effective Time of the Merger. Without limiting the generality
of the foregoing, and except as otherwise expressly contemplated by this
Agreement, the Company shall not, and shall not permit any of its subsidiaries
to:
(i) (A) declare, set aside or pay any dividends (other than
the Company's regular quarterly dividends payable to stockholders on or
after August 14, 1999, and quarterly thereafter) on, or make any other
distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to the Company or a wholly owned subsidiary
of the Company, (B) 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 (C) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities; provided, however, with respect to
clause (A) above after the consummation of the Offer the Company will
make no further dividends or distributions;
(ii) issue, deliver, sell, pledge or otherwise encumber 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
(other than, in the case of the Company, the issuance of Shares upon
the exercise of options outstanding on the date of this Agreement (as
identified and described in Section 3.1(c)(iv) and (v)) in accordance
with their current terms), purchase, redeem or otherwise acquire or
agree to acquire any shares of capital stock or other securities of the
Company or any of its subsidiaries;
(iii) amend any material term of any of its outstanding
securities;
(iv) amend its Certificate of Incorporation, By-laws or other
comparable charter or organizational document;
(v) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the stock
or assets of, or by any other manner, any business or any corporation,
partnership, association, joint venture, limited liability company or
other entity or division thereof or (B) any assets that would be
material, individually or in the aggregate, to the Company and its
subsidiaries taken as a whole, except purchases of supplies and
inventory in the ordinary course of business consistent with past
practice;
(vi) form any joint venture with any other person under
circumstances wherein the Company and its subsidiaries would have any
liability or obligation for a contribution to be evidenced by debt or
equity of such venture in excess of $100,000;
(vii) sell, lease, mortgage, pledge, ▇▇▇▇▇ ▇ ▇▇▇▇ on or
otherwise encumber or dispose of any of its properties or assets,
except (A) sales of inventory in the ordinary course of business
consistent with past practice and (B) other transactions involving not
in excess of $1,000,000 in the aggregate;
(viii) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or 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
agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any
of the foregoing, except for working capital borrowings under currently
existing revolving credit facilities incurred in the ordinary course of
business and except for indebtedness incurred to refund, refinance or
replace indebtedness for borrowed money outstanding on the date hereof,
or (B) make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any
direct or indirect wholly owned subsidiary of the Company;
(ix) make or incur any new capital expenditure not included in
the Company's approved capital expenditure budget for 1999, which,
singly or in the aggregate with all other expenditures, would exceed
$1,000,000;
(x) make or change any Tax election not required by law, other
than consistent with past practice, make any change in any method of
Tax accounting, except as described in the Company Disclosure Document,
enter into any settlement or compromise with respect to any Tax
liability, or make any material change in reserves for Tax items other
than any change in such reserves relating to the ordinary course
operation of the respective businesses of the Company and its
subsidiaries during current taxable periods;
(xi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the SEC
Documents or incurred in the ordinary course of business consistent
with past practice;
(xii) waive the benefits of, or agree to modify in any manner,
any confidentiality, standstill or similar agreement to which the
Company or any of its subsidiaries is a party;
(xiii) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(xiv) enter into any new collective bargaining agreement;
(xv) change any material accounting principle used by it,
except as required by regulations promulgated by the SEC or the
Financial Accounting Standards Board;
(xvi) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements
or compromises: (A) of litigation where the amount paid in settlement
or compromise does not exceed $250,000, or (B) in consultation and
cooperation with Parent, and, with respect to any such settlement, with
the prior written consent of Parent;
(xvii) make any transaction or commitment, or enter into any
contract or agreement relating to its assets or business (including the
acquisition or disposition of any assets) or relinquish any contract or
other right, in either case, material to the Company and its
subsidiaries, taken as a whole, other than transactions and commitments
made or entered into in the ordinary course of business consistent with
past practices and those contemplated by this Agreement; or
(xviii) authorize any of, or commit or agree to take any of,
the foregoing actions.
(b) Changes in Employment Arrangements. Neither the Company
nor any of its subsidiaries shall adopt or amend (except as may be required by
law) any bonus, profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan, agreement,
trust, fund or other arrangement (including any Company Benefit Plan) for the
benefit of any employee, director or former director or employee, increase the
compensation or fringe benefits of any officer of the Company or any of its
subsidiaries, or, except as provided in an existing Company Benefit Plan or in
the ordinary course of business consistent with past practice, increase the
compensation or fringe benefits of any employee or former employee or pay any
benefit not required by any existing plan, arrangement or agreement.
(c) Severance. Neither the Company nor any of its subsidiaries
shall grant any new or modified severance or termination arrangement or increase
or, except as required under the existing terms of a Company Benefit Plan,
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
(d) Other Actions. The Company shall not, and shall not permit
any of its subsidiaries to, take any action that would, or that could reasonably
be expected to, result in any of the representations and warranties of the
Company set forth in this Agreement becoming untrue.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Stockholder Approval; Preparation of Proxy
Statement. (a) The Company will, as soon as practicable following the
consummation of the Offer, duly call, give notice of, convene and hold a meeting
of its stockholders for the purpose of approving and adopting this Agreement and
the Merger and approving related matters, unless the DGCL does not require a
vote of stockholders of the Company for the consummation of the Merger. The
Company will, through its Board of Directors, recommend to its stockholders
approval and adoption of this Agreement and the Merger, except to the extent
that the Board of Directors of the Company shall have withdrawn its approval or
recommendation of this Agreement or the Merger as permitted by Section 8.2.
(b) If required by applicable law, the Company will, as soon
as practicable following the consummation of the Offer, prepare and file a
preliminary Proxy Statement with the SEC and will use its best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy Statement
and all other proxy materials to be mailed to the Company's stockholders. The
Company will notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. If at any time prior to the
approval of this Agreement and the Merger by the Company's stockholders there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, the Company will promptly prepare and mail to its
stockholders such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects.
(c) Parent agrees to cause all Shares purchased pursuant to
the Offer and all other Shares owned by Sub or any other subsidiary of Parent to
be voted in favor of the approval and adoption of this Agreement.
SECTION 5.2. Access to Information.
(a) During the period from the date hereof to the Effective
Time of the Merger, except to the extent otherwise required by applicable law,
(i) the Company shall, and shall cause each of its
subsidiaries, officers, employees, counsel, financial advisors and
other representatives to, afford to Parent, and to Parent's
accountants, counsel, financial advisors and other representatives,
reasonable access to the Company's and its subsidiaries' respective
offices, officers, employees, properties, books, Tax Returns and
related documents and work papers, contracts, commitments and records
and, during such period, the Company shall, and shall cause
each of its subsidiaries, officers, employees, counsel, financial
advisors and other representatives to, furnish promptly to Parent:
(A) a copy of each report, schedule, registration
statement and other document filed by the Company during such
period pursuant to the requirements of Federal or state
securities laws and
(B) all other information concerning its business,
properties, financial condition, operations and personnel as
Parent may from time to time reasonably request so as to
afford Parent a reasonable opportunity to make such review,
examination and investigation of the Company and its
subsidiaries as Parent may reasonably desire to make. The
Company agrees to advise Parent of all material developments
with respect to the Company, its subsidiaries and their
respective assets and liabilities.
(ii) the Company agrees to request PricewaterhouseCoopers to
permit KPMG Peat Marwick to review and examine the work papers of
PricewaterhouseCoopers with respect to the Company and its
subsidiaries, and the officers of the Company will furnish to Parent
such financial and operating data and other information with respect to
the business and properties of the Company and its subsidiaries as
Parent shall from time to time reasonably request,
(iii) the Company shall instruct the officers, employees,
counsel, financial advisors and other representatives of the Company
and its subsidiaries to cooperate with Parent in its investigation of
the Company and its subsidiaries. Any investigation pursuant to this
Section shall be conducted in such a manner as not to interfere
unreasonably with the conduct of the business of the Company and its
subsidiaries,
(iv) the Company shall promptly notify Parent of any notices
from or investigations by Governmental Entities that could, to the
knowledge of the Company, affect the Company's business or assets or
the consummation of the Merger. Parent will promptly notify the Company
of any notices from or investigations by Governmental Entities that
could materially affect Parent's consummation of the Merger; and
(v) the Company shall promptly notify Parent of any notice or
other communication from any person alleging that the consent of such
person is or may be required in connection with the transactions
contemplated by this Agreement.
(b) Except as required by law and without limiting in any way
the continued efficacy of the Confidentiality and Standstill Agreement referred
to in Section 8.1, prior to the Effective Time of the Merger and after any
termination of this Agreement, each of the Company and Parent shall, and shall
cause its respective directors, officers, employees, accountants, counsel,
financial advisors and representatives and affiliates to, (i) hold in
confidence, unless compelled to disclose by judicial or administrative process,
or, in the opinion of its counsel, by other requirements of law, all nonpublic
information concerning the other party furnished in connection with the
transactions contemplated by this Agreement except to the extent that such
information can be shown to have been previously known on a nonconfidential
basis by Parent or later lawfully acquired by Parent from sources other than
the Company, or until such time as such information becomes publicly available
(otherwise than through the wrongful act of such person), (ii) not release or
disclose such information to any other person, except in connection with this
Agreement to its auditors, attorneys, financial advisors, other consultants and
advisors, and (iii) not use such information for any competitive or other
purpose other than with respect to its consideration and evaluation of the
transactions contemplated by this Agreement. Any investigation by any party of
the assets and business of the other party and its subsidiaries shall not affect
any representations and warranties hereunder or either party's right to
terminate this Agreement as provided in Article VII.
(c) In the event of the termination of this Agreement, each
party promptly will deliver to the other party (and destroy all electronic data
reflecting the same) all documents, work papers and other material (and any
reproductions or extracts thereof and any notes or summaries thereto) obtained
by such party or on its behalf from such other party or its subsidiaries as a
result of this Agreement or in connection therewith so obtained before or after
the execution hereof.
SECTION 5.3. Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, except to the
extent otherwise required by applicable law and otherwise provided in this
Section 5.3, each of the parties agrees to use reasonable 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, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement, including (i) 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, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, and (iii) the execution and delivery of any
additional instruments (including any required supplemental indentures)
necessary to consummate the transactions contemplated by this Agreement. In
connection with and without limiting the foregoing, each of the Company and
Parent shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the Merger,
the Offer, this Agreement and the other transactions contemplated by this
Agreement, (ii) if any state takeover statute or similar statute or regulation
becomes applicable to the Merger, the Offer, this Agreement and the other
transactions contemplated by this Agreement, take all action necessary to ensure
that the Merger, the Offer 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
statute or regulation on the Merger, the Offer, this Agreement and the other
transactions contemplated by this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent
or Sub shall give prompt notice to the Company, of (i) any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate in
any respect or (ii) the failure by it to comply with or satisfy in any respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement; provided, however, that no such notification shall affect
the representations or warranties or covenants or agreements of the parties or
the conditions to the obligations of the parties hereunder.
(c) (i) Each of the parties hereto shall file a premerger
notification and report form under the HSR Act (and any other
applicable foreign antitrust law or regulation) with respect to the
Merger as promptly as reasonably possible following execution and
delivery of this Agreement. Each of the parties agrees to use
reasonable efforts to promptly respond to any request for additional
information that may be received from any Governmental Entity in
connection with the HSR filing or any filings under applicable foreign
antitrust laws and regulations.
(ii) The Company will furnish to Parent and Sub copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof (collectively, "Company HSR Documents")) between
the Company, or any of its respective representatives, on the one hand,
and any Governmental Entity, or members of the staff of such agency or
authority, on the other hand, with respect to this Agreement or the
Merger; provided, however, that (x) with respect to documents and other
materials filed by or on behalf of the Company with the Antitrust
Division of the Department of Justice, the Federal Trade Commission, or
any state attorneys general that are available for review by Parent and
Sub, copies will not be required to be provided to Parent and Sub and
(y) with respect to any Company HSR Documents (1) that contain any
information which, in the reasonable judgment of Fulbright & ▇▇▇▇▇▇▇▇
L.L.P., should not be furnished to Parent or Sub because of antitrust
considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of the
Company to furnish any such Company HSR Documents to Parent and Sub
shall be satisfied by the delivery of such Company HSR Documents on a
confidential basis to ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ pursuant to a
confidentiality agreement in form and substance reasonably satisfactory
to Parent. Except as otherwise required by United States regulatory
considerations, Parent and Sub will furnish to the Company copies of
all correspondence, filings or communications (or memoranda setting
forth the substance thereof (collectively, "Parent HSR Documents"))
between Parent, Sub or any of their respective representatives, on the
one hand, and any Governmental Entity, or member of the staff of such
agency or authority, on the other hand, with respect to this Agreement
or the Merger; provided, however, that (x) with respect to documents
and other materials filed by or on behalf of Parent or Sub with the
Antitrust Division of the Department of Justice, the Federal Trade
Commission, or any state attorneys general that are available for
review by the Company, copies will not be required to be provided to
the Company, and (y) with respect to any Parent HSR Documents (1) that
contain information which, in the reasonable judgment of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, should not be furnished to the Company because of antitrust
considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of Parent
and Sub to furnish any such Parent HSR Documents to the Company shall
be satisfied by the delivery of such Parent HSR Documents on a
confidential basis to Fulbright & ▇▇▇▇▇▇▇▇ L.L.P. pursuant to a
confidentiality agreement in form and substance reasonably satisfactory
to the Company.
(iii) Notwithstanding the foregoing, nothing contained in this
Agreement shall be construed so as to require Parent, Sub or the
Company, or any of their respective subsidiaries or affiliates, to
sell, license, dispose of, or hold separate, or to operate in any
specified manner, any assets or businesses of Parent, Sub, the Company
or the Surviving Corporation or to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby,
or to seek and to have any stay or temporary restraining order entered
by any court or other Governmental Entity vacated or reversed (or to
require Parent, Sub, the Company or any of their respective
subsidiaries or affiliates to agree to any of the foregoing). The
obligations of each party under Section 5.3(a) to use reasonable
efforts with respect to antitrust matters shall be limited to
compliance with the reporting provisions of the HSR Act and with its
obligations under this Section 5.3(c).
SECTION 5.4. Employee Benefit Matters.
(a) Replacement Plans. Parent may cause any Company Benefit
Plan to be terminated or discontinued at or after the Effective Time of the
Merger, provided that, to the extent Parent or its affiliates maintain a Parent
Benefit Plan of the same type for employees of Parent or any of its affiliates,
Parent shall use its best efforts to permit the Company Employees participating
in such Company Benefit Plan (other than any stock option or other stock based
incentive plan) to immediately thereafter participate in a Parent Benefit Plan
of the same type maintained by Parent or any of its affiliates for their
employees generally (a "Replacement Plan"); provided, however, that if the
Company Benefit Plan that is so terminated or discontinued is a group health
plan, then Parent shall permit each Company Employee participating in such group
health plan and his or her eligible dependents to be covered under a Replacement
Plan under the terms and conditions of the Replacement Plan as modified to the
extent necessary to (i) provide medical and dental benefits to each such Company
Employee and such eligible dependents effective immediately upon the cessation
of coverage of such individuals under such group health plan, (ii) credit to
such Company Employee, for the year during which such coverage under such
Replacement Plan begins, with any deductibles and copayments already incurred
during such year under such group health plan, and (iii) waive any preexisting
condition restrictions to the extent that the preexisting condition restrictions
were satisfied under such group health plan. Parent, the Surviving Corporation,
their affiliates, and the Parent Benefit Plans (including, without limitation,
the Replacement Plans) shall recognize each Company Employee's years of service
and level of seniority with the Company and its subsidiaries for purposes of
terms of employment, eligibility and vesting under the Parent Benefit Plans.
Nothing in this Agreement shall be construed to require Parent to provide any
particular type or amount of benefits for any person under any Parent Benefit
Plan.
(b) Stock Options and Stock Awards. (1) At or immediately
prior to the Effective Time of the Merger, each outstanding stock option to
purchase Shares and award of Shares granted under any stock option or
compensation plan or arrangement of the Company, whether or not vested or
exercisable, shall be canceled, and promptly after the Effective Time of the
Merger the Company shall pay (i) each holder of any such option for each such
option an amount in cash (net of applicable withholding taxes) determined by
multiplying the excess, if any, of $21.25 per Share over the applicable exercise
price of such Share under such option by the number of Shares subject to such
option (whether or not vested or exercisable), and (ii) each holder of any such
award of Shares an amount in cash (net of applicable withholding taxes)
determined by multiplying $21.25 times the number of Shares subject to such
award (whether or not vested). Notwithstanding the foregoing, the amount of any
payment pursuant to this Section 5.4(b) shall be subject to any relevant limit
or cap under any employment or change in control agreement between the Company
and the applicable individual.
(2) Prior to the Effective Time of the Merger,
the Company shall (i) use its best efforts to obtain any consents from holders
of options to purchase Shares and awards of Shares granted under the Company's
employee stock option or compensation plans or arrangements and (ii) make any
amendments to the terms of such stock option or compensation plans or
arrangements that, in the case of either clauses (i) or (ii), are necessary to
give effect to the transactions contemplated by Section 5.4(b)(1).
Notwithstanding any other provision of this Section 5.4(b), payment may be
withheld in respect of an employee stock option or award of Shares until such
necessary consents are obtained with respect to such option or award of Shares.
(3) The parties hereto expressly acknowledge
and agree that for purposes of the change of control agreements listed on
Schedule II, such payment of consideration upon the cancellation of a stock
option pursuant to this Section 5.4(b) shall be treated as attributable to the
exercise of such stock options.
SECTION 5.5. Indemnification. (a) The Company shall, and from and after
the Effective Time of the Merger, Parent and the Surviving Corporation shall,
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective Time of the
Merger, an officer or director of the Company or any of its subsidiaries or an
employee of the Company or any of its subsidiaries who acts as a fiduciary under
any Company Benefit Plans (the "Indemnified Parties") against all losses,
claims, damages, costs, expenses (including attorneys' fees), liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of or in
connection with any threatened or actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was a director, officer or such employee of the
Company or any subsidiary whether pertaining to any matter existing or occurring
at or prior to the Effective Time of the Merger and whether asserted or claimed
prior to, or at or after, the Effective Time of the Merger (including arising
out of or relating to the Merger, the consummation of the transactions
contemplated herein, and any action taken in connection therewith)
("Indemnified Liabilities"). Any Indemnified Party wishing to claim
indemnification under this Section 5.5, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify the Company (or after the
Effective Time of the Merger, Parent and the Surviving Corporation), but the
failure so to notify shall not relieve a party from any liability that it may
have under this Section 5.5, except to the extent such failure materially
prejudices such party. The Indemnified Parties as a group may retain only one
law firm to represent them with respect to each such matter unless there is,
under applicable standards of professional conduct, a conflict between the
positions of any two or more Indemnified Parties.
(b) Parent shall purchase and maintain in effect, or the Company shall
be permitted to purchase and maintain in effect, for the benefit of the
Indemnified Parties for a period of six years after the Effective Time,
directors' and officers' liability insurance of at least the same coverage and
amounts containing terms and conditions that are no less advantageous in any
material respect to the Indemnified Parties than that maintained by the Company
and its Subsidiaries as of the date of this Merger Agreement with respect to
matters arising before the Effective Time, provided that Parent shall not be
required to pay an annual premium of such insurance in excess of two times the
last annual premium paid by the Company prior to the date hereof, but in such
case shall purchase as much coverage as possible for such amounts.
(c) All rights to indemnification for acts or omissions occurring prior
to the Effective Time of the Merger now existing in favor of the Indemnified
Parties as provided in the Certificate of Incorporation or by-laws of the
Company or its subsidiaries and in any indemnification agreements existing as of
the date hereof to which they are parties shall survive the Merger, and the
Surviving Corporation shall continue such indemnification rights for acts or
omissions occurring prior to the Effective Time of the Merger in full force and
effect in accordance with their terms and Parent shall be financially
responsible therefor.
(d) The provisions of this Section 5.5 are intended to be for the
benefit of, and shall be enforceable by, each indemnified party, his heirs and
representatives.
SECTION 5.6. Fees and Expenses. Except as provided in Article VIII, all
fees and expenses incurred in connection with the Offer, the Merger, this
Agreement and the other transactions contemplated hereby shall be paid by the
party incurring such fees or expenses, whether or not the Offer or the Merger is
consummated.
SECTION 5.7. Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement and the transactions contemplated by this Agreement and shall not
issue any such press release or make any such public statement prior to such
consultation, except that each party may respond to questions from stockholders
and Parent may respond to inquiries from financial analysts and media
representatives in a manner consistent with its past practice and each party may
make such disclosure as may be required by applicable law or by obligations
pursuant to any listing agreement with any national securities exchange without
prior consultation to the extent such consultation is not reasonably
practicable. The parties agree that the initial press release or releases to be
issued in connection with the execution of this Agreement shall be mutually
agreed upon prior to the issuance thereof.
SECTION 5.8. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors as of the date hereof or as of
immediately prior to the Effective Time of the Merger relating to the
transactions contemplated by this Agreement until the Effective Time of the
Merger, and thereafter, shall give Parent the opportunity to control the defense
of such litigation and, if Parent so chooses to control such litigation, Parent
shall give the Company and such directors an opportunity to participate in such
litigation; provided, however, that no settlement of such litigation shall be
agreed to without the consent of Parent, the Company and such directors, which
consent shall not be unreasonably withheld.
SECTION 5.9. Directors. Effective upon the acceptance for payment of,
and payment by Sub for, any Shares pursuant to the Offer, Sub shall be entitled
to designate such number of directors on the Board of Directors of the Company
as will give Sub, subject to compliance with Section 14(f) of the Exchange Act,
representation on such Board of Directors equal to at least that number of
directors, rounded up to the next whole number, which is the product of (a) the
total number of directors on such Board of Directors (giving effect to the
directors elected pursuant to this sentence) multiplied by (b) the percentage
that (i) such number of Shares so accepted for payment and paid for by Sub plus
the number of Shares otherwise owned by Sub or any other subsidiary of Parent
bears to (ii) the number of Shares outstanding, and the Company shall, at such
time, cause Sub's designees to be so elected; provided, however, that in the
event that Sub's designees are appointed or elected to the Board of Directors of
the Company, until the Effective Time of the Merger such Board of Directors
shall have at least three directors who are directors on the date hereof and who
are not officers of the Company (the "Independent Directors") and provided
further that, in such event, if the number of Independent Directors shall be
reduced below three for any reason whatsoever, any remaining Independent
Directors (or Independent Director, if there shall be only one remaining) shall
be entitled to designate persons to fill such vacancies who shall be deemed to
be Independent Directors for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate three persons to fill
such vacancies who shall not be officers, stockholders or affiliates of the
Company, Parent or Sub, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Subject to applicable law, the Company
shall promptly take all action necessary to effect any such election, including
mailing to its stockholders the Information Statement (the "Information
Statement") containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and the Company agrees to make such
mailing with the mailing of Schedule 14D-9 (provided that Sub shall have
provided to the Company on a timely basis all information required to be
included in the Information Statement with respect to Sub's designees). In
connection with the foregoing, the Company will promptly, at the option of Sub,
either increase the size of the Company's Board of Directors or obtain the
resignation of such number of its current directors as is necessary to enable
Sub's designees to be elected or appointed to the Company's Board of Directors
as provided above.
SECTION 5.10. Tax Certification. At any time during the period
beginning on the date hereof and ending on the Effective Time of the Merger, the
Company shall provide to Parent, within two business days of a request by
Parent, a certificate meeting the requirements of Treas. Reg. ss. 1.897-2(h) to
the effect that the Company is not, nor has it been within 5 years of the date
thereof, a "United States real property holding corporation" as defined in
Section 897 of the Code.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. 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 prior to the Effective Time of the Merger of the following
conditions:
(a) Stockholder Approval. If required by the DGCL, this
Agreement shall have been approved and adopted by the affirmative vote
or consent of the stockholders of the Company by the requisite vote in
accordance with the DGCL and the Company's Certificate of
Incorporation.
(b) Other Approvals. All authorizations, consents, orders or
approvals of, or declarations or filings with, or terminations or
expirations of waiting periods imposed by, any Governmental Entity
necessary for the consummation of the transactions contemplated by this
Agreement shall have been filed, shall have occurred or shall have been
obtained.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
Governmental Entity or court of competent jurisdiction or statute, rule
or regulation restraining or prohibiting the consummation of the Merger
shall be in effect; provided, however, that each of the parties shall
have used reasonable efforts, subject to the limitations set forth in
Section 5.3 hereof, to prevent the entry of any such injunction or
other order.
SECTION 6.2. Conditions to Obligation of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the condition
that (i) the Company shall have performed in all material respects all
obligations to be performed by it under this Agreement at or prior to the
Effective Time of the Merger and (ii) the representations and warranties of the
Company contained in this Agreement and in any certificate or other writing
delivered by the Company pursuant hereto, disregarding all qualifications and
exceptions contained herein and therein relating to materiality or material
adverse effect or any similar standard or qualification, shall be true in all
material respects at and as of the Effective Time of the Merger as if made at
and as of such time.
SECTION 6.3. Condition to Obligation of the Company. The
obligation of the Company to effect the Merger is subject to the condition that
(i) Parent and Sub shall have performed in all material respects all obligations
to be performed by them under this Agreement at or prior to the Effective Time
of the Merger and (ii) the representations and warranties of Parent and Sub
contained in this Agreement and in any certificate or other writing delivered by
Parent or Sub pursuant hereto, disregarding all qualifications and exceptions
contained herein and therein relating to materiality or material adverse effect
or any similar standard or qualification, shall be true in all material respects
at and as of the Effective Time of the Merger as if made at and as of such time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at
any time prior to the Effective Time of the Merger, whether before or after
approval of matters presented in connection with the Merger by the stockholders
of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the stockholders of the Company fail to give
any required approval of the Merger and the transactions
contemplated hereby upon a vote at a duly held meeting of
stockholders of the Company or at any adjournment thereof;
(ii) if (w) as a result of the failure of any of the
conditions set forth in paragraphs (a) through (h) of Exhibit
A hereto, Sub shall have failed to commence the Offer within 5
business days of the date hereof or (x) as a result of the
failure of any of the conditions set forth in Exhibit A hereto
the Offer shall have been terminated or expired in accordance
with its terms without Sub having purchased any Shares
pursuant to the Offer or (y) Sub shall not have purchased any
Shares pursuant to the Offer within 180 days following the
date hereof; provided, however, that the passage of the period
referred to in clause (y) shall be tolled for any part thereof
during which the Offer shall have been extended pursuant to
one or more Special Extensions but in no event shall such
period be tolled for more than 90 days; and provided further
that the right to terminate this Agreement pursuant to this
Section 7.1(b)(ii) shall not be available to any party whose
failure to perform any of its obligations under this Agreement
results in the failure of any such condition;
(iii) if the Merger shall not have been consummated
on or before the date one year following the purchase of
Shares pursuant to the Offer, unless the failure to consummate
the Merger is the result of a material breach of this
Agreement by the party seeking to terminate this Agreement;
provided, however, that the passage of such period shall be
tolled for any part thereof during which any party shall be
subject to a nonfinal order, decree or ruling or action
restraining, enjoining or otherwise prohibiting the
consummation of the Merger or the calling or holding of a
meeting of the stockholders of the Company called to approve,
inter alia, the Merger; or
(iv) if any court of competent jurisdiction or any
Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the purchase of Shares
pursuant to the Offer or the Merger and such order, decree,
ruling or other action shall have become final and
nonappealable.
(c) by the Company in accordance with the provisions of
Section 8.2;
(d) by Parent in accordance with the provisions of
Section 8.2;
(e) by Parent, if the Company breaches in any material respect
any of its representations or warranties herein or fails to perform in any
material respect any of its covenants, agreements or obligations under this
Agreement;
(f) by the Company, if Parent or Sub breaches in any material
respect any of its representations or warranties herein or fails to perform in
any material respect any of its covenants, agreements or obligations under this
Agreement; or
(g) by Parent, if Parent shall have received any communication
from the Department of Justice or Federal Trade Commission (each an "HSR
Authority") (which communication shall be confirmed to the Company by the HSR
Authority) that causes Parent to reasonably believe that any HSR Authority has
authorized the institution of litigation challenging the transactions
contemplated by this Agreement under the U.S. antitrust laws, which litigation
will include a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by this Agreement.
The party desiring to terminate this Agreement pursuant to
this Section 7.1 (other than pursuant to Section 7.1(a)) shall give notice of
such termination to the other party.
SECTION 7.2. Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 7.1, an
amendment of this Agreement pursuant to Section 7.4 or an extension or waiver
pursuant to Section 7.5 shall, in order to be effective, require action by a
majority of the members of the Board of Directors of the Company who were
members thereof on the date of this Agreement and remain as such hereafter or
the duly authorized designees of such members; provided, however, that in the
event that Sub's designees are appointed or elected to the Board of Directors of
the Company as provided in Section 5.9, after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time of the Merger, the
affirmative vote of a majority of the Independent Directors, in lieu of the
vote required pursuant to this Section, shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights or remedies under this Agreement or (iii) extend the time for
performance of Parent's and Sub's respective obligations under this Agreement.
SECTION 7.3. Effect of Termination. In the event of
termination of this Agreement by either the Company or Parent as provided in
Section 7.1, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
except that no such termination shall relieve any party of any liability or
damages resulting from any willful breach by such party of this Agreement. The
confidentiality provisions of Sections 5.2(b) and (c) and the provisions of
Sections 3.1(h), 3.1(i), 3.2(d), 5.6, 7.3, 8.1, 8.2, 8.3 and Article IX shall
survive any termination hereof.
SECTION 7.4. Amendment. This Agreement may be amended by the
parties at any time before or after any required approval of matters presented
in connection with the Merger by the stockholders of the Company; provided,
however, that after any such approval, there shall be made no amendment that by
law requires further approval by such stockholders without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of all of the parties hereto.
SECTION 7.5. Extension; Waiver. At any time prior to the
Effective Time of the Merger, the parties may, to the extent legally allowed,
(a) extend the time for the performance of any of the obligations or the other
acts of the other parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or (c)
subject to the proviso of Section 7.4, 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. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
SECTION 8.1. Takeover Defenses of the Company and Standstill
Agreements. The Company shall take such action with respect to any anti-takeover
provisions in its charter or afforded it by statute to the extent necessary to
facilitate the Offer and consummate the Merger on the terms set forth in this
Agreement. The Company hereby waives the provisions of the letter agreement
dated April 1, 1999 (the "Confidentiality and Standstill Agreement"), between
the Company and Parent, prohibiting the purchase of Shares or acting to
influence or control the Company.
SECTION 8.2. No Solicitation. (a) From the date hereof until
the termination hereof, the Company will not, and will cause its subsidiaries
and the officers, directors, employees, investment bankers, attorneys,
accountants, consultants or other agents or advisors of the Company and its
subsidiaries not to, directly or indirectly, (i) take any action to solicit,
initiate, facilitate or encourage the submission of any takeover proposal, (ii)
engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Company or any of its subsidiaries or afford access
to the properties, books or records of the Company or any of its subsidiaries
to, any person who may be considering making, or has made, a takeover proposal,
(iii) grant any waiver or release under any standstill or similar agreement with
respect to any class of equity securities of the Company, (iv) to the fullest
extent permitted by the DGCL, amend or grant any waiver or release or approve
any transaction or redeem rights under the Company Rights Agreement or (v) enter
into any agreement with respect to a takeover proposal (other than the
confidentiality and standstill agreement described in (c)(iii) below).
(b) The Company will notify Parent promptly (but in no event
later than 24 hours) after receipt by the Company (or any of its advisors) of
any takeover proposal or any request for nonpublic information relating to the
Company or any of its subsidiaries or for access to the properties, books or
records of the Company or any of its subsidiaries by any person who may be
considering making, or has made, a takeover proposal. The Company shall provide
such notice orally and in writing and shall identify the person making, and the
price, terms and conditions of, any such takeover proposal or request. The
Company shall keep Parent fully informed, on a current basis, of the status and
details of any such takeover proposal or request. The Company shall, and shall
cause its subsidiaries and the directors, employees and other agents of the
Company and its subsidiaries to, (i) cease immediately and cause to be
terminated all activities, discussions and negotiations, if any, with any
persons conducted prior to the date hereof with respect to any takeover proposal
and (ii) require all such persons to return to the Company all confidential
information provided by or on behalf of the Company and to destroy any materials
prepared by such persons based upon such confidential information. Nothing
contained in this Agreement shall prevent the Board of Directors of the Company
from complying with Rule 14e-2 under the Exchange Act with respect to any
takeover proposal. For purposes of this Agreement, "takeover proposal" means (i)
any offer or proposal for, other than a proposal by Parent or any of its
affiliates, a merger or other business combination involving the Company or any
of its subsidiaries, (ii) any proposal or offer, other than a proposal or offer
by Parent or any of its affiliates, to acquire from the Company or any of its
affiliates in any manner, directly or indirectly, an equity interest in the
Company or any subsidiary, any voting securities of the Company or any
subsidiary or a material amount of the assets of the Company and its
subsidiaries, taken as a whole, or (iii) any proposal or offer, other than a
proposal or offer by Parent or any of its affiliates, to acquire from the
stockholders of the Company by tender offer, exchange offer or otherwise more
than 20% of the outstanding Shares.
(c) Notwithstanding the foregoing, the Company may negotiate
or otherwise engage in substantive discussions with, and furnish nonpublic
information to, any person who delivers a superior proposal if (i) the Company
has complied with the terms of this Section 8.2, including, without limitation,
the requirement in Section 8.2(b) that it notify Parent promptly after its
receipt of any takeover proposal, (ii) the Board of Directors of the Company
determines in good faith by a majority of the disinterested members thereof, on
the basis of advice from outside legal counsel to the Company, that it should
take such action to comply with its fiduciary duties under applicable law, (iii)
such person executes a confidentiality and standstill agreement with terms no
less favorable to the Company than those contained in the Confidentiality and
Standstill Agreement, and (iv) the Company shall have delivered to Parent a
prior written notice advising Parent that it intends to take such action. In
furtherance and not in limitation of the foregoing, the Company shall give
Parent at least 24 hours' advance notice of any information to be supplied to
any person making such superior proposal. For purposes of this Agreement,
"superior proposal" means any bona fide, written takeover proposal to acquire,
directly or indirectly, for consideration consisting of cash, securities or a
combination thereof, at least a majority of the Shares then outstanding or all
or substantially all the assets of the Company, and otherwise on terms which a
majority of disinterested members of the Board of Directors of the Company
determines in its good faith reasonable judgment (based on the written advice of
its financial advisor, a copy of which shall be provided to Parent, and taking
into account all the terms and conditions of the takeover proposal, including
any break-up fees, expense reimbursement provisions and conditions to
consummation) to be more favorable and provide greater value to all the
Company's stockholders than the Offer, the Merger and the transactions
contemplated hereby and for which the financing, to the extent required, is then
committed or in the judgment of such majority of disinterested members of the
Board of Directors of the Company is reasonably obtainable.
(d) Except as provided in the next sentence, the Board of
Directors of the Company shall recommend approval and adoption of this Agreement
and that the holders of the Shares tender their Shares pursuant to the Offer and
vote to approve the Merger and the transactions contemplated hereby and shall
advise the stockholders of the determination by the Board of Directors that the
transactions contemplated hereby, including the Offer and the Merger, are fair
to and in the best interests of the stockholders of the Company. The Board of
Directors of the Company shall be permitted to withdraw, or modify in a manner
adverse to Parent or Sub, its recommendation to its stockholders, but only if
(x) the Company has complied with the terms of this Section 8.2, including,
without limitation, the requirement in Section 8.2(b) that it notify Parent
promptly after its receipt of any takeover proposal and in Section 8.2(e) that
it provide Parent with an opportunity to respond to any superior proposal, (y) a
superior proposal is pending at the time the Company's Board of Directors
determines to take any such action and (z) the Company's Board of Directors
determines in good faith by a majority of the disinterested members thereof, on
the basis of consultations with its financial advisors and the advice of outside
legal counsel to the Company, that it should take such action to comply with its
fiduciary duties under applicable law.
(e) Prior to exercising the right of the Company's Board of
Directors pursuant to Section 8.2(d) to withdraw or modify its recommendation,
the Company shall (i) notify Parent in writing that it intends to enter into a
binding written agreement concerning a transaction that constitutes a superior
proposal, attaching the most current version of such agreement to such notice
(which version shall be updated on a current basis) and (ii) provide Parent with
an opportunity to respond to such superior proposal within two business days of
receipt of such written notice by making an offer that the Company's Board of
Directors determines in good faith, after consultation with its financial
advisors, by a majority of the disinterested members thereof, is more favorable
to the stockholders of the Company than the superior proposal. The Company
agrees to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after giving
such notification.
(f) In the event that Parent shall not make an offer described
in (e)(ii) above, the Company may terminate this Agreement; provided that the
Company shall pay to Parent the Termination Fee (as defined below) prior to such
termination.
(g) In the event that (i) the Board of Directors of the
Company or any committee thereof shall (A) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Sub the approval or
recommendation by the Board of Directors of the Company or any such committee of
this Agreement, the transactions contemplated hereby, and the Offer or the
Merger, or take any action having such effect or (B) approve or recommend, or
propose to approve or recommend, any takeover proposal; (ii) the Company shall
provide Parent with any notice described in (e)(i) above; or (iii) the Company
shall have entered into any agreement (other than any confidentiality and
standstill agreement entered into in accordance with this Section 8.2) with
respect to any takeover proposal, Parent may terminate this Agreement
immediately.
(h) Any breach of the provisions of this Section 8.2 shall be
deemed a material breach of this Agreement.
SECTION 8.3. Fee and Expense Reimbursements.
(a) If this Agreement is terminated pursuant to Section
7.1(c), 7.1(d), 8.2(f) or 8.2(g), the Company shall pay to Parent a termination
fee in immediately available funds of $15 million in cash (the "Termination
Fee"). The Company shall pay to Parent the Termination Fee (i) immediately prior
to the termination of this Agreement in the event this Agreement is
terminated pursuant to Section 7.1(c) or 8.2(f) or (ii) promptly upon
termination of this Agreement in the event this Agreement is terminated pursuant
to Section 7.1(d) or 8.2(g).
(b) In the event that (i) a takeover proposal is made by any
person during the pendency of the Offer, other than by Parent or Sub, (ii) the
Offer shall have terminated or expired without the Minimum Tender Condition
being satisfied and (iii) within one year after the Offer shall have terminated
or expired, either (A) the Company enters into an agreement (which is
subsequently consummated, whether before or after the expiration of such one
year period) with any person, other than Parent or Sub, with respect to a
takeover proposal which provides for (1) the transfer or issuance of securities
representing more than 50% of the equity or voting interests in the Company, or
(2) transfer of assets, securities or ownership interests representing more than
50% of the consolidated assets or earning power of the Company, or (B) any
person acquires a majority of the Shares, then the Company shall pay to Parent
the Termination Fee (as defined above). Any payment of such Termination Fee
shall be paid within one business day after it becomes payable.
(c) In the event (i) this Agreement is terminated by Parent or
the Company pursuant to Sections 7.1(b)(i) 7.1(c), 7.1(d), 7.1(e), 8.2(f) or
8.2(g) or (ii) the Company shall be required to pay the Termination Fee pursuant
to Section 8.3(b), the Company shall assume and pay, or reimburse Parent for,
all reasonable fees and expenses incurred by Parent or Sub (including the fees
and expenses of its counsel, accountants and financial advisors) through the
date of termination of this Agreement or, in the case of clause (ii) above, the
Offer, and which are specifically related to the Offer, the Merger, this
Agreement and the matters contemplated by this Agreement, but not to exceed
$2,500,000 in the aggregate, promptly, but in no event later than five business
days after submission of a request for payment of the same.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Nonsurvival of Representations and Warranties.
None of the representations, warranties, covenants or agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time of the Merger. This Section 9.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time of the Merger.
SECTION 9.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile or sent by overnight courier to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to
▇▇▇▇▇▇▇ Electric Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
Senior Vice President
with a copy to
▇▇▇▇▇▇▇ Electric Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President, General
Counsel and Secretary
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Company, to
▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇ ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇▇▇
Chairman, President and Chief
Executive Officer
with a copy to
▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
General Counsel
with a copy to:
Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Still, Esq.
SECTION 9.3. 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" means, with respect to any matter stated
herein to be "to the Company's knowledge," or similar language, the actual
knowledge (including without limitation, any matter which a person holding the
office and performing the functions of such person, should reasonably be
expected to know) of the Chairman of the Board, the Chief Executive Officer,
President, any Vice President or Chief Financial Officer of the Company or the
president at each division of the Company, and with respect to any matter stated
herein to be "to Parent's knowledge," or similar language, the actual knowledge
of the Chairman of the Board, the Chief Executive Officer, President, any Vice
President, Chief Financial Officer or General Counsel of Parent.
(c) "material adverse effect" or "material adverse change"
means, when used in connection with any person, any change or effect (or any
development that, insofar as can reasonably be foreseen, is likely to result in
any change or effect) that is materially adverse to the business, properties,
assets, condition (financial or otherwise) or results of operations of that
person and its subsidiaries, taken as a whole.
(d) "person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization or
other entity; and
(e) a "subsidiary" of any person means any corporation,
partnership, association, joint venture, limited liability company or other
entity in which such person owns over 50% of the stock or other equity
interests, the holders of which are generally entitled to vote for the election
of directors or other governing body of such other legal entity.
SECTION 9.4. Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to 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".
SECTION 9.5. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein), the
Stock Option Agreement dated the date hereof between Parent and the Company and
the Confidentiality and Standstill Agreement (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 hereof and (b) except for
the provisions of Section 5.5, are not intended to confer upon any person other
than the parties any rights or remedies hereunder.
SECTION 9.7. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 9.8. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
SECTION 9.9. Enforcement of the Agreement. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. 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 hereof in any district
court of the United States located in the State of Delaware or in any Delaware
state court, 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 any Federal or state
court sitting in the State of Delaware in the event any dispute between the
parties hereto arises out of this Agreement solely in connection with such a
suit between the parties, (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 in any court other than such a Federal or state court.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 9.11. Performance by Sub. Parent hereby agrees to
cause Sub to comply with its obligations under this Agreement and the Offer.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
▇▇▇▇▇▇▇ ELECTRIC CO.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
Title: Senior Vice President--
Acquisitions and Development
EMERSUB LXXIV, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
Title: Vice President
▇▇▇▇▇▇ INDUSTRIES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
EXHIBIT A
Conditions to the Offer
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange
Act (relating to Sub's obligation to pay for or return tendered Shares after
the termination or withdrawal of the Offer), to pay for any Shares tendered
pursuant to the Offer, and may terminate the Offer, unless (i) there shall
have been validly tendered and not withdrawn prior to the expiration date of
the Offer that number of Shares which would represent at least 66-2/3% of the
Fully Diluted Shares (the "Minimum Tender Condition"), (ii) any waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
shall have expired or been terminated (the "HSR Condition") and (iii) any
filings or approvals under applicable foreign antitrust laws and regulations
shall have been made and obtained and any related waiting periods shall have
expired. The term "Fully Diluted Shares" means all Shares, on a fully diluted
basis, after giving effect to the exercise or conversion of all options,
warrants, rights and securities exercisable or convertible into Shares, other
than potential issuances attributable to the Rights unless such Rights shall
be exercisable pursuant to the Company's Rights Agreement. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Sub shall not
be required to accept for payment or, subject as aforesaid, to pay for any
Shares not theretofore accepted for payment or paid for, and may terminate or
amend the Offer, with the consent of the Company (except as otherwise provided
in this Agreement) or if, at any time on or after the date of this Agreement
and before the acceptance of such Shares for payment or the payment therefor,
any of the following conditions exists:
(a) there shall be any action taken, or any statute, rule,
regulation, decree, order or injunction enacted, enforced, promulgated,
issued or deemed applicable to the Offer or the Merger, by any court,
government or governmental authority or agency, domestic or foreign,
other than the application of the waiting period provisions of the HSR
Act to the Offer or the Merger, that is likely to (i) make illegal,
delay materially or restrain or prohibit the making or consummation of
the Offer or the Merger or restrains or prohibits the performance of
this Agreement and the transactions contemplated hereby, (ii) in
connection with the transactions contemplated by this Agreement,
prohibit or limit the ownership or operation by Parent or Sub of all or
any material portion of the business or assets of the Company, Parent
or any of their respective subsidiaries, or compel Parent or any of its
subsidiaries to dispose of or to hold separate all or any material
portion of the business or assets of the Company, Parent or any of
their subsidiaries (taken as a whole for purposes of materiality), or
imposes any material limitation on the ability of the Company, Parent
or any of their respective subsidiaries to conduct such business or own
such assets, (iii) impose material limitations on the ability of Parent
or Sub (or any other affiliate of Parent or Sub) to acquire or hold or
to exercise full rights of ownership of the Shares, including, but not
limited to, the right to vote the Shares purchased by Sub on all
matters properly presented to the stockholders of the Company , or
(iv) require divestiture by Parent, Sub or any of Parent's other
subsidiaries or affiliates of any Shares;
(b) there shall be instituted or pending any action or any
investigation or other inquiry by any Governmental Entity that is
likely to result in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) it shall have been publicly disclosed or Parent shall have
otherwise learned that (i) any person or "group" (as defined in Section
13(d)(3) of the Exchange Act) shall have acquired beneficial ownership
of more than 25% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation
of a group or otherwise, or shall have been granted any option, right
or warrant, conditional or otherwise, to acquire beneficial ownership
of more than 25% of any class or series of capital stock of the Company
(including the Shares); or (ii) any person or group shall have entered
into a definitive agreement or an agreement in principle with the
Company regarding an acquisition of 25% or more of the Shares or a
merger, consolidation or other business combination;
(d) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Sub its approval or recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any takeover proposal, (ii) the
Company shall have recommended or entered into any agreement (other
than any confidentiality and standstill agreement entered into in
accordance with Section 8.2) with respect to any takeover proposal,
(iii) the Company shall have delivered to Parent a notice of superior
proposal, or (iv) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the foregoing;
(e) there shall have occurred a material adverse change in the
Company and its subsidiaries, taken as a whole, or a material adverse
effect on the Company and its subsidiaries, taken as a whole, it being
understood , however, that no such change or effect shall be deemed to
have occurred to the extent such change or effect arises from
conditions generally affecting the Company's industry or from the
United States or global economies.
(f) any of the representations and warranties of the Company
set forth in this Agreement that are qualified as to materiality shall
not be true and correct and any such representations and warranties
that are not so qualified shall not be true and correct in any material
respect, in each case (i) as of the date of this Agreement or any other
date as of which such representations and warranties expressly speak or
(ii) at any time prior to the consummation of the Offer as if made at
and as of such time, it being understood, however, that with respect to
clause (ii) no representation or warranty shall be deemed to be not
true and correct to the extent that the failure to be so arises from
conditions generally affecting the Company's industry or from the
United States or global economies and further that the consequence of
such failure to be true and correct (disregarding all references to
materiality or material adverse effect therein) is a material adverse
change or effect on the Company and its subsidiaries, taken as a whole;
(g) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under this Agreement which failure has not been cured; or
(h) this Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Sub and Parent
and, subject to the terms and conditions of this Agreement, may be waived by Sub
and Parent in whole or in part at any time and from time to time in their sole
discretion.
