AGREEMENT AND PLAN OF MERGER
by and among
WHX CORPORATION
HN ACQUISITION CORP.
and
HANDY & XXXXXX
March 1, 1998
TABLE OF CONTENTS
ARTICLE I
THE OFFER AND MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Company Actions . . . . . . . . . . . . . . . . . . . . 4
Section 1.3 Directors . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.4 The Merger . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.5 Effective Time . . . . . . . . . . . . . . . . . . . . 8
Section 1.6 Closing . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.7 Directors and Officers of the Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . 8
Section 1.8 Shareholders' Meeting . . . . . . . . . . . . . . . . . 9
Section 1.9 Merger Without Meeting of
Shareholders . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.1 Conversion of Capital Stock . . . . . . . . . . . . . 10
Section 2.2 Exchange of Certificates . . . . . . . . . . . . . . 11
Section 2.3 Lost Certificates . . . . . . . . . . . . . . . . . . 13
Section 2.4 Dissenting Shares . . . . . . . . . . . . . . . . . . 13
Section 2.5 Company Option Plans . . . . . . . . . . . . . . . . 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . 15
Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . 15
Section 3.2 Capitalization . . . . . . . . . . . . . . . . . . . 16
Section 3.3 Authorization; Validity of Agreement;
Company Action . . . . . . . . . . . . . . . . . . 18
Section 3.4 Consents and Approvals; No Violations . . . . . . . . 18
Section 3.5 SEC Reports and Financial Statements . . . . . . . . 20
Section 3.6 No Undisclosed Liabilities . . . . . . . . . . . . . 20
Section 3.7 Absence of Certain Changes . . . . . . . . . . . . . 21
Section 3.8 Employee Benefit Plans; ERISA . . . . . . . . . . . . 21
Section 3.9 Litigation . . . . . . . . . . . . . . . . . . . . . 23
Section 3.10 No Default; Compliance with
Applicable Laws . . . . . . . . . . . . . . . . . . 24
Section 3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.12 Real Property . . . . . . . . . . . . . . . . . . . . 26
Section 3.13 Environmental Matters . . . . . . . . . . . . . . . . 26
Section 3.14 Information in Schedule 14D-1 . . . . . . . . . . . . 27
Section 3.15 Compliance with Laws . . . . . . . . . . . . . . . . 27
Section 3.16 HSR Approval . . . . . . . . . . . . . . . . . . . . 27
Section 3.17 Precious Metals Inventories . . . . . . . . . . . . . 28
Section 3.18 Opinion of Financial Advisor . . . . . . . . . . . . 28
Section 3.19 Voting Requirements . . . . . . . . . . . . . . . . . 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND
THE PURCHASER . . . . . . . . . . . . . . . . . . . 28
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . 28
Section 4.2 Authorization; Validity of Agreement;
Necessary Action . . . . . . . . . . . . . . . . . 29
Section 4.3 Consents and Approvals; No Violations . . . . . . . . 29
Section 4.4 Information in Proxy Statement;
Schedule 14D-9 . . . . . . . . . . . . . . . . . . 30
Section 4.5 Financing . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.6 Share Ownership . . . . . . . . . . . . . . . . . . . 31
Section 4.7 Purchaser's Operations . . . . . . . . . . . . . . . 31
Section 4.8 HSR Approval . . . . . . . . . . . . . . . . . . . . 31
Section 4.9 Investigation by Parent and Purchaser . . . . . . . . 31
ARTICLE V
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.1 Interim Operations of the Company . . . . . . . . . . 32
Section 5.2 Approvals and Consents; Cooperation . . . . . . . . . 35
Section 5.3 Actions Regarding the Rights . . . . . . . . . . . . 35
Section 5.4 Access to Information . . . . . . . . . . . . . . . . 35
Section 5.5 Repayment of Borrowings Under Credit
Agreement . . . . . . . . . . . . . . . . . . . . . 36
Section 5.6 Consents and Approvals . . . . . . . . . . . . . . . 36
Section 5.7 Employee Benefits . . . . . . . . . . . . . . . . . . 37
Section 5.8 No Solicitation . . . . . . . . . . . . . . . . . . . 39
Section 5.9 Brokers or Finders . . . . . . . . . . . . . . . . . 40
Section 5.10 Publicity . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.11 Notification of Certain Matters . . . . . . . . . . . 41
Section 5.12 Directors' and Officers' Insurance and
Indemnification . . . . . . . . . . . . . . . . . . 41
Section 5.13 Further Assurances . . . . . . . . . . . . . . . . . 43
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.1 Conditions to Each Party's Obligation To
Effect the Merger . . . . . . . . . . . . . . . . . 44
ARTICLE VII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 45
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . 47
Section 7.3 Termination Fee . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.1 Amendment and Modification. . . . . . . . . . . . . . 48
Section 8.2 Nonsurvival of Representations
and Warranties . . . . . . . . . . . . . . . . . . 48
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.4 Interpretation . . . . . . . . . . . . . . . . . . . 50
Section 8.5 Counterparts . . . . . . . . . . . . . . . . . . . . 50
Section 8.6 Entire Agreement; Third Party
Beneficiaries . . . . . . . . . . . . . . . . . . . 50
Section 8.7 Severability . . . . . . . . . . . . . . . . . . . . 50
Section 8.8 Governing Law . . . . . . . . . . . . . . . . . . . . 51
Section 8.9 Jurisdiction . . . . . . . . . . . . . . . . . . . . 51
Section 8.10 Assignment . . . . . . . . . . . . . . . . . . . . . 52
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 1, 1998, by and
among WHX Corporation, Delaware corporation ("Parent"), HN Acquisition
Corp., a New York corporation and a direct, wholly owned subsidiary of
Parent (the "Purchaser"), and Handy & Xxxxxx, a New York corporation (the
"Company").
WHEREAS, Parent and the Purchaser have proposed acquiring all of
the outstanding common stock, par value $1.00 per share, of the Company
(the "Shares" or "Company Common Stock") at a price of $35.25 per Share in
cash;
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have approved, and deem it advisable and in the best interests of
their respective shareholders to consummate, the acquisition of the Company
by Parent upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. (a) As promptly as practicable (but in
no event later than five business days after the public announcement of the
execution hereof), the Purchaser shall commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) an offer (the "Offer") to purchase for cash all shares of the issued
and outstanding Company Common Stock (together with the related Common
Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement between the Company and ChaseMellon Shareholder Services, L.L.C.,
dated as of January 26, 1989, as amended as of April 25, 1996 and October
22, 1996 (the "Rights Agreement"), at a price of $35.25 per Share, net to
the seller in cash (such price, or such higher price per Share as may be
paid in the Offer, being referred to herein as the "Offer Price"), subject
to there being validly tendered and not withdrawn prior to the expiration
of the Offer, that number of Shares which, together with the Shares
beneficially owned by Parent or the Purchaser, represent at least a
majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and to the other conditions set forth in Annex A hereto. The
Purchaser shall, on the terms and subject to the prior satisfaction or
waiver (except that the Minimum Condition may not be waived) of the
conditions of the Offer, accept for payment and pay for Shares tendered as
soon as it is legally permitted to do so under applicable law. The
obligations of the Purchaser to commence the Offer and to accept for
payment and to pay for any Shares validly tendered on or prior to the
expiration of the Offer and not withdrawn shall be subject only to the
Minimum Condition and the other conditions set forth in Annex A hereto.
The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") containing the terms set forth in this Agreement, the Minimum
Condition and the other conditions set forth in Annex A hereto. The
Purchaser shall not amend or waive the Minimum Condition and shall not
decrease the Offer Price or decrease the number of Shares sought, or amend
any other condition of the Offer in any manner adverse to the holders of
the Shares (other than with respect to insignificant changes or amendments)
without the prior written consent of the Company (such consent to be
authorized by the Board of Directors of the Company or a duly authorized
committee thereof); provided, however, that (i) subject to applicable legal
requirements, Parent may cause Purchaser to waive any condition to the
Offer, as set forth in Annex A, in Parent's reasonable judgment and (ii)
the Offer may be extended in connection with an increase in the
consideration to be paid pursuant to the Offer so as to comply with
applicable rules and regulations of the United States Securities and
Exchange Commission ("SEC"). Notwithstanding the foregoing, the Purchaser
shall, and Parent agrees to cause the Purchaser to, extend the Offer at any
time up to May 1, 1998 for one or more periods of not more than 10 business
days, if at the initial expiration date of the Offer, or any extension
thereof, any condition to the Offer is not satisfied or required. The
Purchaser may also, in its sole discretion, extend the expiration date of
the Offer for up to 10 additional business days after the initial
expiration date. In addition, the Offer Price may be increased and the
Offer may be extended to the extent required by law in connection with such
increase in each case without the consent of the Company.
(b) As soon as practicable on the date the Offer is
commenced, Parent and the Purchaser shall file with the SEC a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer (together with all
amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-1"). The Schedule 14D-1 will include, as exhibits, the Offer
to Purchase and a form of letter of transmittal and summary advertisement
(collectively, together with any amendments and supplements thereto, the
"Offer Documents"). The Offer Documents will comply in all material
respects with the provisions of applicable federal securities laws and, on
the date filed with the SEC and on the date first published, sent or given
to the Company's shareholders, 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 the Purchaser with respect to
information supplied by the Company in writing for inclusion in the Offer
Documents. Each of Parent and the Purchaser further agrees to take all
steps necessary to cause the Offer Documents to be filed with the SEC and
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Each of Parent and the
Purchaser, on the one hand, and the Company, on the other hand, agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false and
misleading in any material respect and the Purchaser further agrees to take
all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
The Company and its counsel shall be given the opportunity to review the
initial Schedule 14D-1 before it is filed with the SEC. In addition,
Parent and the Purchaser agree to provide the Company and its counsel in
writing with any comments or other communications that Parent, the
Purchaser or their counsel may receive from time to time from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of
such comments or other communications.
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the
Offer and represents that the Board of Directors, at a meeting duly called
and held, has, subject to the terms and conditions set forth herein, (i)
approved this Agreement and the transactions contemplated hereby, including
the Offer and the Merger (as defined in Section 1.4) (collectively, the
"Transactions"), and such approvals constitute approval of the Offer, this
Agreement and the Merger for purposes of Sections 902 and 912 of the New
York Business Corporation Law (the "NYBCL") and similar provisions of any
other similar state statutes that might be deemed applicable to the
transactions contemplated hereby, (ii) resolved to recommend that the
shareholders of the Company accept the Offer, tender their Shares
thereunder to the Purchaser and approve and adopt this Agreement and the
Merger and the Company hereby consents to the inclusion in the Offer
Documents of such recommendation; provided, that such recommendation may be
withdrawn, modified or amended if, in the good faith opinion of the Board
of Directors, after consultation with independent legal counsel, such
recommendation would be inconsistent with its fiduciary duties to the
Company's shareholders under applicable law and (iii) approved the
redemption of the Rights prior to the consummation of the Offer according
to the provisions of the Rights Agreement. The Company represents that the
actions set forth in this Section 1.2(a) and all other actions it has taken
in connection therewith are, assuming the accuracy of, and in reliance
upon, the information received in writing from Parent as to the ownership
of Shares by Parent and their affiliates, sufficient to render the relevant
provisions of Section 912 of the NYBCL inapplicable to the Offer and the
Merger. The Company further represents that Xxxxxxx, Xxxxx & Co.
("Goldman") has delivered to the Board of Directors of the Company the
Fairness Opinion as described in Section 3.18.
(b) Concurrently with the commencement of the Offer, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject
to the fiduciary duties of the Company's directors under applicable law and
to the provisions of this Agreement, contain the recommendation referred to
in clause (ii) of Section 1.2(a) hereof. The Schedule 14D-9 will comply in
all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published,
sent or given to the Company's shareholders, 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 the Purchaser in writing for inclusion in
the Offer Documents. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Each of the Company, on
the one hand, and Parent and the Purchaser, on the other hand, agrees
promptly to correct any information provided by it for use in the Schedule
14D-9 if and to the extent that it shall have become false and misleading
in any material respect and the Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable federal securities laws. Parent and its
counsel shall be given the opportunity to review the initial Schedule 14D-9
before it is filed with the SEC. In addition, the Company agrees to
provide Parent, the Purchaser and their counsel in writing with any
comments or other communications that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments or other
communications. Notwithstanding anything to the contrary contained herein,
if the members of the Board of Directors of the Company determine in the
exercise of their fiduciary duties to withdraw, modify or amend the
recommendation referred to in clause (ii) of Section 1.2(a) hereof, such
withdrawal, modification or amendment shall not constitute a breach of this
Agreement.
(c) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to the Purchaser mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of a recent
date, and shall furnish the Purchaser with such information and assistance
as the Purchaser or its agents may reasonably request in communicating the
Offer to the shareholders of the Company. Except for such steps as are
necessary to disseminate the Offer Documents, Parent and the Purchaser
shall hold in confidence the information contained in any of such labels
and lists and the additional information referred to in the preceding
sentence, will use such information only in connection with the Offer, and,
if this Agreement is terminated, will upon request of the Company deliver
or cause to be delivered to the Company all copies of such information then
in its possession or the possession of its agents or representatives.
(d) The Company shall amend the Rights Agreement as set
forth in Annex B hereto, which amendment will be effective as of the date
hereof.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares by
Parent or any of its subsidiaries which represent at least a majority of
the outstanding shares of Company Common Stock (on a fully diluted basis),
Parent shall be entitled to designate such number of directors, rounded up
to the next whole number, on the Board of Directors of the Company as is
equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Parent pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares
beneficially owned by the Purchaser, Parent and any of their affiliates
bears to the total number of shares of Company Common Stock then
outstanding (such number being the "Board Percentage")provided, however,
that if the number of Shares purchased by Parent or any of its Subsidiaries
equals or exceeds 50.01% of the outstanding Shares, the Board Percentage
will in all events be at least a majority of the members of the Board of
Directors of the Company. The Company shall, upon request of the
Purchaser, use its best efforts to cause Parent's designees to satisfy the
Board Percentage, including without limitation increasing the size of its
Board of Directors (which, pursuant to the Company's Restated Certificate
of Incorporation, as amended (the "Certificate of Incorporation"), has a
maximum number of twelve directors) and securing resignations of such
number of its incumbent directors as is necessary to enable Parent's
designees to be so elected to the Company's Board, and shall promptly cause
Parent's designees to be so elected. Notwithstanding the foregoing, until
the Effective Time (as defined in Section 1.5 hereof), the Company shall
retain as members of its Board of Directors at least two directors who are
directors of the Company on the date hereof (the "Company Designees");
provided, that subsequent to the purchase of and payment for Shares
pursuant to the Offer, Parent shall always have its designees represent at
least a majority of the entire Board of Directors. The Company's
obligations under this Section 1.3(a) shall be subject to Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder. Parent or the
Purchaser will supply the Company any information with respect to either of
them and their nominees, officers, directors and affiliates required by
Section 14(f) and Rule 14f-1. Upon receipt of such information from Parent
or the Purchaser, the Company shall include in the Schedule 14D-9 (as an
annex or otherwise) the information required by Section 14(f) and Rule 14f-
1 as is necessary to enable Parent's designees to be elected to the
Company's Board of Directors.
(b) From and after the time, if any, that Parent's
designees constitute a majority of the Company's Board of Directors, any
amendment of this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or the Purchaser hereunder, any waiver of any condition or any of
the Company's rights hereunder or other action by the Company hereunder may
be effected only by the action of a majority of the directors of the
Company then in office who were directors of the Company on the date
hereof, which action shall be deemed to constitute the action of the full
Board of Directors; provided, that if there shall be no such directors,
such actions may be effected by majority vote of the entire Board of
Directors of the Company.
Section 1.4 The Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time (as defined in Section 1.5 hereof),
the Company and the Purchaser shall consummate a merger (the "Merger")
pursuant to which (a) the Purchaser shall be merged with and into the
Company and the separate corporate existence of the Purchaser shall
thereupon cease, (b) the Company shall be the successor or surviving
corporation in the Merger (the "Surviving Corporation") and shall continue
to be governed by the laws of the State of New York, and (c) the separate
corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger.
Pursuant to the Merger, (x) the Certificate of Incorporation of the
Purchaser, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation until
thereafter amended as provided by law and such Certificate of
Incorporation, and (y) the By-laws of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation and such By-laws. The Merger shall have the
effects set forth in the NYBCL.
Section 1.5 Effective Time. Parent, the Purchaser and the
Company will cause an appropriate Certificate of Merger (the "Certificate
of Merger") to be executed and filed on the date of the Closing (as defined
in Section 1.6) (or on such other date as Parent and the Company may agree)
with the Department of State of the State of New York (the "Department of
State") as provided in the NYBCL. The Merger shall become effective on the
date on which the Certificate of Merger has been duly filed with the
Department of State or such time as is agreed upon by the parties and
specified in the Certificate of Merger, and such time is hereinafter
referred to as the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., on a date to be specified by the parties,
which shall be no later than the second business day after satisfaction or
waiver of all of the conditions set forth in Article VI hereof (the
"Closing Date"), at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless another date or place is
agreed to in writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation.
The directors and officers of the Purchaser at the Effective Time shall,
from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their successors shall
have been duly elected or appointed or qualified or until their earlier
death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws.
Section 1.8 Shareholders' Meeting.
(a) If required by applicable law in order to consummate
the Merger, the Company, acting through its Board of Directors, shall, in
accordance with applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its shareholders (the "Special Meeting") as soon as
practicable following the acceptance for payment and purchase of
Shares by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon the approval of the Merger and the
adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
or information statement relating to the Merger and this Agreement and
use its reasonable efforts (x) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Parent, to respond
promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive
proxy or information statement (the "Proxy Statement") to be mailed to
its shareholders and (y) to obtain the necessary approvals of the
Merger and this Agreement by its shareholders; and
(iii) subject to the fiduciary obligations of the
Board under applicable law as advised by independent counsel, include
in the Proxy Statement the recommendation of the Board that
shareholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted,
all of the Shares then owned by it, the Purchaser or any of its other
subsidiaries and affiliates in favor of the approval of the Merger and the
adoption of this Agreement.
Section 1.9 Merger Without Meeting of Shareholders.
Notwithstanding Section 1.8 hereof, in the event that Parent, the Purchaser
or any other subsidiary of Parent shall acquire, together with the Shares
owned by Parent, the Purchaser or any other subsidiary of Parent, at least
90% of the outstanding shares of each class of capital stock of the
Company, pursuant to the Offer or otherwise, the parties hereto agree to
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting
of shareholders of the Company, in accordance with Section 905 of the
NYBCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the
holders of any shares of Company Common Stock or common stock, par value
$0.01 per share, of the Purchaser (the "Purchaser Common Stock"):
(a) Purchaser Common Stock. Each issued and outstanding
share of the Purchaser Common Stock shall be converted into and become one
fully paid and nonassessable share of common stock of the Surviving
Corporation with the result that the Surviving Corporation will be a
wholly-owned subsidiary of Parent.
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
All shares of Company Common Stock that are owned by the Company as
treasury stock and any shares of Company Common Stock owned by Parent, the
Purchaser or any other wholly owned Subsidiary (as defined in Section 3.1
hereof) of Parent shall be cancelled and retired and shall cease to exist
and no consideration shall be delivered in exchange therefor.
(c) Exchange of Shares. Each issued and outstanding share
of Company Common Stock (other than Shares to be cancelled in accordance
with Section 2.1(b) and any Dissenting Shares (if applicable and as defined
in Section 2.4 hereof)), shall be converted into the right to receive the
Offer Price, payable to the holder thereof, without interest (the "Merger
Consideration"), upon surrender of the certificate formerly representing
such share of Company Common Stock in the manner provided in Section 2.2.
All such shares of Company Common Stock, when so converted, shall no longer
be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration therefor upon the surrender of
such certificate in accordance with Section 2.2, without interest, or to
perfect any rights of appraisal as a holder of Dissenting Shares that such
holder may have pursuant to Section 623 of the NYBCL.
Section 2.2 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust
company reasonably acceptable to the Company to act as agent for the
holders of shares of Company Common Stock in connection with the Merger
(the "Paying Agent") to receive the funds to which holders of shares of
Company Common Stock shall become entitled pursuant to Section 2.1(c).
Such funds shall be invested by the Paying Agent as directed by Parent or
the Surviving Corporation and any interest or other income resulting from
such investments will be paid to Parent from time to time upon request by
Parent.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time but in no event more than three business days
thereafter, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the
"Certificates"), whose shares were converted pursuant to Section 2.1 into
the right to receive the Merger Consideration, (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 shall be in such form and have such
other provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for payment of 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 Parent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration for each
share of Company Common Stock formerly represented by such Certificate and
the Certificate so surrendered shall forthwith be cancelled. If payment of
the Merger Consideration is to be made to a person other than the person in
whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the
person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a person
other than the registered holder of the Certificate surrendered or shall
have established to the satisfaction of the Surviving Corporation that such
tax either has been paid or is not applicable. Until surrendered as
contemplated by this Article II, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive the
Merger Consideration in cash as contemplated by this Article II. No
interest will be paid or will accrue on any cash payable to the holders of
Certificates pursuant to the provisions of this Article II.
(c) Transfer Books; No Further Ownership Rights in Company
Common Stock. At the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further
registration of transfers of shares of Company Common Stock on the records
of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of shares of Company Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares, except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall be
cancelled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time
following one year after the Effective Time, the Surviving Corporation
shall be entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders
of Certificates, and thereafter such holders shall be entitled to look to
the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates, without any
interest thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If
any Certificate has not been surrendered prior to the expiration of the
applicable statute of limitations after the Effective Time (or immediately
prior to such earlier date on which any Merger Consideration payable to the
holder of such Certificate representing Shares pursuant to this Article II
would otherwise escheat to or become the property of any Governmental
Entity (as hereinafter defined)), any such Merger Consideration in respect
of such Certificate will become the property of the Surviving Corporation,
free and clear of all claims or interest of any individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity (a "Person") previously
entitled thereto.
Section 2.3 Lost Certificates. If any Certificate is 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 issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration, in accordance
with the provisions of this Agreement.
Section 2.4 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for
such Shares in accordance with Section 623 of the NYBCL ("Dissenting
Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If, after the Effective Time, such
holder fails to perfect or withdraws or loses his right to appraisal, such
Shares shall be treated as if they had been converted as of the Effective
Time into a right to receive the Merger Consideration, without interest
thereon.
Section 2.5 Company Option Plans. Parent and the Company shall
take all actions necessary to provide that, effective as of the Effective
Time, (i) each outstanding employee stock option to purchase Shares (an
"Employee Option") granted under the Company's Long-Term Incentive Stock
Option Plan (the "ISO Plan") or the Company's 1995 Omnibus Stock Incentive
Plan (the "1995 Option Plan") and each outstanding non-employee director
option to purchase Shares ("Director Options" and collectively with
Employee Options, "Options") granted under the Company's Outside Director
Stock Option Plan (the "Director Plan" and collectively with the ISO Plan
and the 1995 Option Plan, the "Option Plans"), whether or not then
exercisable or vested, shall become fully exercisable and vested, (ii) each
Option that is then outstanding shall be cancelled and (iii) in
consideration of such cancellation, and except to the extent that Parent or
the Purchaser and the holder of any such Option otherwise agree, the
Company (or, at Parent's option, the Purchaser) shall pay to such holders
of Options an amount in respect thereof equal to the product of (A) the
excess, if any, of the Offer Price over the exercise price of each such
Option and (B) the number of Shares subject thereto (such payment to be net
of applicable withholding taxes).
Except as may be otherwise agreed to by the Parent or the
Purchaser, all stock option plans of the Company shall terminate as of the
Effective Time and the provisions of any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be terminated
as of the Effective Time and no holder of Options or any participant in any
option plan or any other plan, program or arrangement shall have any right
thereunder to acquire any equity securities of the Company or the Surviving
Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser
as follows:
Section 3.1 Organization. Each of the Company and its
Subsidiaries (as defined in this Section 3.1) is a corporation, partnership
or other entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization and has
all requisite corporate or other power and authority and all necessary
governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to
be so organized, existing and in good standing or to have such power,
authority, and governmental approvals would not have a material adverse
effect on the Company and its Subsidiaries taken as a whole. As used in
this Agreement, the word "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated,
of which (i) such party or any other Subsidiary of such party is a general
partner (excluding such partnerships where such party or any Subsidiary of
such party do not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. As
used in this Agreement, any reference to any event, change or effect being
material or having a material adverse effect on or with respect to any
entity (or group of entities taken as a whole) means such event, change or
effect that is materially adverse to the consolidated financial condition,
businesses, properties, assets or results of operations of such entity or a
combination thereof (or, if used with respect thereto, of such group of
entities taken as a whole). The Company and each of its Subsidiaries is
duly qualified or licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not in the aggregate have a material
adverse effect on the Company and its Subsidiaries taken as a whole. The
Company has delivered to Parent prior to the execution of this Agreement
complete and correct copies of its certificate of incorporation and by-laws
and has made available to Parent the certificate of incorporation and
by-laws (or comparable organizational documents) of each of its
Subsidiaries, in each case as amended to date. Exhibit 21 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
includes all subsidiaries of the Company required to be listed thereon
(each a "Subsidiary", and collectively, the "Subsidiaries"). Except as set
forth on Schedule 3.1 hereof, the Company does not own any minority
interests in any other corporation representing at least 5% of the equity
interest of such corporation or participate in joint ventures with any
other party.
Section 3.2 Capitalization. (a) The authorized capital stock
of the Company consists of 60,000,000 shares of Company Common Stock. As
of the date hereof, (i) 12,131,288 shares of Company Common Stock are
issued and outstanding (of which 92,973 shares were granted on February 26,
1998 pursuant to the Fifth Cycle of the Company's Long-Term Incentive
Plan), (ii) 2,480,144 shares of Company Common Stock are issued and held in
the treasury of the Company, (iii) 1,371,104 shares of Company Common Stock
are reserved for issuance upon exercise of then outstanding Options granted
under the Option Plans and (iv) 156,139 shares of Company Common Stock have
been allocated for the Sixth Cycle of the Company's Long-Term Incentive
Plan (which allocation would amount to 69,395 shares of Company Common
Stock assuming a May 1, 1998 proration date in the event of a "change in
control" (as defined in such Plan)). Schedule 3.2(a) sets forth the
number and weighted average exercise price of Options outstanding as of the
date hereof. As of the date hereof there are 12,131,288 shares of Common
Stock reserved for issuance upon exercise of the Rights. All the
outstanding shares of the Company Common Stock are, and all shares which
may be issued pursuant to the exercise of outstanding Options or Rights
when issued in accordance with the respective terms thereof will be, duly
authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness having general voting rights (or convertible into
securities having such rights) ("Voting Debt") of the Company or any of its
Subsidiaries issued and outstanding. Except (a) as set forth above, and
(b) for the transactions contemplated by this Agreement, as of the date
hereof, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding, (ii) there are no existing options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements
or commitments of any character, relating to the issued or unissued capital
stock of the Company or any of its Subsidiaries, obligating the Company or
any of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any of its Subsidiaries or securities
convertible into or exchangeable for such shares or equity interests, or
obligating the Company or any of its Subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right,
agreement, arrangement or commitment, and (iii) there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Shares, or capital stock of the
Company or any subsidiary or affiliate of the Company.
(b) Except as set forth on Schedule 3.2, all the outstanding
shares of capital stock of each Subsidiary have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly by the
Company, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens").
(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party
with respect to the voting of the capital stock of the Company or any of
the Subsidiaries. None of the Company or its Subsidiaries is required to
redeem, repurchase or otherwise acquire shares of capital stock of the
Company, or any of its Subsidiaries, respectively, as a result of the
transactions contemplated by this Agreement.
Section 3.3 Authorization; Validity of Agreement; Company
Action. (a) The Company has full corporate power and authority to execute
and deliver this Agreement and, subject to obtaining the necessary approval
of its shareholders, to consummate the transactions contemplated hereby.
The execution, delivery and performance by the Company of this Agreement,
and the consummation by it of the transactions contemplated hereby, have
been duly authorized by its Board of Directors and, except for those
actions contemplated by Section 1.2(a) hereof and obtaining the approval of
its shareholders as contemplated by Section 1.8 hereof, no other corporate
action on the part of the Company is necessary to authorize the execution
and delivery by the Company of this Agreement and the consummation by it of
the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, subject to approval and adoption
of this Agreement by the Company's shareholders (and assuming due and valid
authorization, execution and delivery hereof by the other parties thereto)
is a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws, now or hereafter in effect, affecting creditors'
rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(b) The Board of Directors of the Company has approved and
taken all corporate action required to be taken by the Board of Directors
for the consummation of the transactions contemplated by this Agreement.
The Board of Directors of the Company also has approved the transactions
contemplated by this Agreement for the purposes of rendering the provisions
of Section 912 of the NYBCL inapplicable to such transactions.
Section 3.4 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state or
foreign laws relating to takeovers, state securities or blue sky laws and
the NYBCL, neither the execution, delivery or performance of this Agreement
by the Company nor the consummation by the Company of the transactions
contemplated hereby nor compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws or similar
organizational documents of the Company or of any of its Subsidiaries, (ii)
require on the part of the Company any filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other
regulatory authority or agency (a "Governmental Entity"), except where the
failure to obtain such permits, authorizations, consents or approvals or to
make such filings would not have a material adverse effect on the Company
and its Subsidiaries taken as a whole, (iii) except for the Revolving
Credit Agreement, dated as of September 29, 1997, among the Company, the
lenders party thereto and the Bank of Nova Scotia, as Administrative Agent
(the "Credit Agreement"), and the Note Purchase Agreement, dated as of
April 17, 1997, among the Company and the Purchasers party thereto (the
"Note Agreement"), result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the
terms, conditions or provisions of any material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound and
which has been filed as an exhibit to the Company SEC Documents (as defined
in Section 3.5) (the "Material Agreements") or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its Subsidiaries or any of their properties or assets,
excluding from the foregoing clauses (iii) or (iv) such violations,
breaches or defaults which would not, individually or in the aggregate,
have a material adverse effect on the Company and its Subsidiaries taken as
a whole, and which will not materially impair the ability of the Company to
consummate the transactions contemplated hereby.
Section 3.5 SEC Reports and Financial Statements. Except as set
forth in Schedule 3.5, the Company has filed with the SEC, and has
heretofore made available to Parent true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by
it since December 31, 1996 under the Exchange Act that were filed and
publicly available prior to the date of this Agreement (as such documents
have been amended since the time of their filing, collectively, the
"Company SEC Documents"). As of their respective dates or, if amended, as
of the date of the last such amendment, the Company SEC Documents,
including, without limitation, any financial statements or schedules
included therein did not contain any untrue statement of a material fact or
omit 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. None of the Subsidiaries is required
to file any forms, reports or other documents with the SEC pursuant to
Section 12 or 15 of the Exchange Act. The financial statements of the
Company (the "1997 Financial Statements") included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 (including
the related notes thereto) (the "1996 Form 10-K") and in the quarterly
reports on Form 10-Q for the three fiscal quarters occurring since the 1996
Form 10-K have been prepared from, and are in accordance with, the books
and records of the Company and its consolidated subsidiaries, comply in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto and subject, in
the case of unaudited interim financial statements, to normal year-end
adjustments) and fairly present the consolidated financial position and the
consolidated results of operations and cash flows of the Company and its
consolidated subsidiaries as at the dates thereof or for the periods
presented therein.
Section 3.6 No Undisclosed Liabilities. Except (a) as disclosed
in the Company SEC Documents or on Schedule 3.6 hereto, (b) for liabilities
incurred in the ordinary course of business and consistent with past
practice and (c) for liabilities incurred in connection with the
consummation of the transactions contemplated hereby, since September 30,
1997, neither the Company nor any of its Subsidiaries has incurred any
liabilities which, individually or in the aggregate, would be reasonably
expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole and would be required by GAAP to be reflected
on a consolidated balance sheet of the Company and its Subsidiaries
(including the notes thereto).
Section 3.7 Absence of Certain Changes. Except as disclosed in
the Company SEC Documents or on Schedule 3.7 hereto, since September 30,
1997, the Company and its Subsidiaries have conducted their respective
businesses in the ordinary course of business and there has not been (i)
any change in the business of the Company or the amount, character or
ownership interests of the Company's assets that has resulted in a material
adverse effect on the Company and its Subsidiaries, taken as a whole; (ii)
any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to the
equity interests of the Company or of any of its Subsidiaries other than
the regular quarterly cash dividends; (iii) any change by the Company or
any of its Subsidiaries in accounting principles or methods, except insofar
as may be required by a change in GAAP; (iv) any split, combination or
reclassification of any of the Company's capital stock or any issuance or
the authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of the Company's capital stock (other
than the Rights) or (v) any change by the Company or any of its
Subsidiaries of any actuarial or other assumption used to calculate funding
obligations with respect to any Company pension plans, or change the manner
in which contributions to any Company pension plans are made or the basis
on which such contributions are determined.
Section 3.8 Employee Benefit Plans; ERISA.
(a) Schedule 3.8 hereto sets forth a list of all material
employee benefit plans, (including but not limited to plans described in
section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), maintained by the Company, any of its Subsidiaries or
any trade or business, whether or not incorporated (an "ERISA Affiliate"),
which together with the Company would be deemed a "single employer" within
the meaning of section 4001(b)(15) of ERISA ("Benefit Plans") and all
material employment and severance agreements with employees of the Company
("Employee Agreements"). True and complete copies of all Employee
Agreements have been made available to Parent by the Company.
(b) With respect to each Benefit Plan, except as otherwise
disclosed on Schedule 3.8: (i) if intended to qualify under section 401(a)
or 401(k) of the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder (the "Code"), such plan has received
a determination letter from the Internal Revenue Service stating that it so
qualifies and that its trust is exempt from taxation under section 501(a)
of the Code; (ii) such plan has been administered in all material respects
in accordance with its terms and applicable law; (iii) no breaches of
fiduciary duty have occurred which might reasonably be expected to give
rise to material liability on the part of the Company; (iv) no disputes are
pending, or, to the knowledge of the Company, threatened that might
reasonably be expected to give rise to material liability on the part of
the Company; (v) no prohibited transaction (within the meaning of Section
406 of ERISA) has occurred that might reasonably be expected to give rise
to material liability on the part of the Company; and (vi) all
contributions required to be made to such plan as of the date hereof
(taking into account any extensions for the making of such contributions)
have been made in full.
(c) No Benefit Plan is a "multiemployer pension plan," as
defined in section 3(37) of ERISA, nor is any Benefit Plan a plan described
in section 4063(a) of ERISA.
(d) No liability under Title IV of ERISA has been incurred
by the Company or any ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a material risk to the Company or any
ERISA Affiliate of incurring a material liability under such Title. No
Benefit Plan has incurred an accumulated funding deficiency, as defined in
section 302 of ERISA or section 312 of the Code, whether or not waived.
(e) With respect to each Benefit Plan that is a "welfare
plan" (as defined in section 3(1) of ERISA), no such plan provides medical
or death benefits with respect to current or former employees of the
Company or any of its Subsidiaries beyond their termination of employment
(other than to the extent required by applicable law).
(f) Neither the Company nor any of its Subsidiaries has
been reimbursed by the federal government or any other Governmental Entity
relating to any pension or welfare benefits, or any other employee benefits
or fringe benefits maintained or contributed to by the Company.
(g) To the knowledge of the Company, there has been no
violation (or tax incurred under) Section 4980B of the Code or
Sections 601-609 of ERISA with respect to any Benefit Plan that could
result in material liability.
(h) Subject to applicable requirements of ERISA, the Code
and collective bargaining agreements, neither any provision of any Benefit
Plan nor any agreement with any employee nor any representation or course
of conduct by or on behalf of the Company or its ERISA Affiliates would
prevent the amendment or termination after the Effective Time of any
Benefit Plan without liability to Parent, the Purchaser, the Company or
their ERISA Affiliates.
(i) Based on the valuation as of January 1, 1997, as
appropriately adjusted through December 31, 1997, for purposes of financial
disclosure in the Company's financial statements, the assets of the Handy &
Xxxxxx Pension Plan, the Handy & Xxxxxx Hourly Pension Plan and the Handy &
Xxxxxx Bargain Unit Pension Plan exceed the FAS 87 liabilities (i.e., the
projected benefit obligations) by an amount in excess of $120 million.
(j) Schedule 3.8 identifies all material written employment
agreements and severance agreements with employees of the Company and its
Subsidiaries in effect or committed to be put into effect as of the date
hereof (an "Employee Agreement").
Section 3.9 Litigation. Except as disclosed in the Company SEC
Documents or on Schedule 3.9 hereto, there is no suit, action or proceeding
pending or, to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries which, individually or in the aggregate, is
reasonably likely to have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
Section 3.10 No Default; Compliance with Applicable Laws.
Except as set forth on Schedule 3.10 hereto, the business of the Company
and each of its Subsidiaries is not in default or violation of any term,
condition or provision of (i) its respective articles of incorporation or
by-laws or similar organizational documents, (ii) any Material Agreement or
(iii) any federal, state, local or foreign statute, law, ordinance, rule,
regulation, judgment, decree, order, concession, grant, franchise, permit
or license or other governmental authorization or approval applicable to
the Company or any of its Subsidiaries, excluding from the foregoing
clauses (ii) and (iii), defaults or violations which would not,
individually or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
Section 3.11 Taxes. (a) The Company and its Subsidiaries have
(i) duly filed (or there has been filed on their behalf) with the
appropriate governmental authorities all Tax Returns (as defined in Section
3.11(f)) required to be filed by them on or prior to the date hereof, other
than those Tax Returns the failure of which to file would not, individually
or in the aggregate, have a material adverse effect on the Company and its
Subsidiaries, taken as a whole, and such Tax Returns are true, correct and
complete in all material respects, and (ii) duly paid in full or made
provision in accordance with generally accepted accounting principles (or
there has been paid or provision has been made on their behalf) for the
payment of all Taxes (as defined in Section 3.11(f)) shown to be due on
such Tax Returns.
(b) Except as set forth on Schedule 3.11 hereto, there are
no ongoing federal, state, local or foreign audits or examinations of any
Tax Return of the Company or its Subsidiaries. Except as set forth on
Schedule 3.11, the Company and its Subsidiaries have not received any
written notice of audit, are not undergoing any audit of its Tax Returns,
and have not received any written notice of deficiency or assessment from
any taxing authority with respect to liability for Taxes of the Company or
any Subsidiary, which has not been fully paid or finally settled, except
for such audits, deficiencies and assessments relating to liabilities which
would not, individually or in the aggregate, have a material adverse effect
on the Company and its Subsidiaries.
(c) Except as set forth on Schedule 3.11 hereto, there are
no outstanding requests, agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment of any Taxes
or deficiencies against the Company or any of its Subsidiaries, and no
power of attorney granted by either the Company or any of its Subsidiaries
with respect to any Taxes is currently in force. The Company has not filed
a request with the Internal Revenue Service for changes in accounting
methods within the last two years, which change would materially affect the
accounting for tax purposes, directly or indirectly, of the Company.
(d) Except as set forth on Schedule 3.11, neither the
Company nor any of its Subsidiaries is a party to any agreement providing
for the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including, without limitation, income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, service use, license, net worth,
payroll, franchise, transfer and recording taxes, fees and charges, imposed
by the United States Internal Revenue Service or any taxing authority
(domestic or foreign), including, without limitation, any state, county,
local or foreign government or any subdivision or taxing agency thereof
(including a United States possession)), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall
include any interest, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or
other assessments. "Tax Return" shall mean any report, return, document,
declaration or other information or filing required to be supplied to any
taxing authority or jurisdiction (domestic or foreign) with respect to
Taxes.
Section 3.12 Real Property. The Company and the Subsidiaries,
as the case may be, have good and marketable title or valid leasehold
rights to all real property purported to be owned by them or used in the
conduct of their respective businesses as currently conducted with only
such exceptions as individually or in the aggregate would not have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
Section 3.13 Environmental Matters. (a) Except as set forth in
the Company SEC Documents or in Schedule 3.13:
(i) since December 31, 1996, the Company has not
received any written communication from any person or entity
(including any Governmental Entity) stating or alleging that it may be
a potentially responsible party under Environmental Law (as defined in
Section 3.13(b)) with respect to any actual or alleged environmental
contamination; neither the Company nor, to the Company's knowledge,
any Governmental Entity is conducting or has conducted any
environmental remediation or environmental investigation which could
reasonably be expected to result in liability for the Company under
Environmental Law; and the Company has not received any request for
information under Environmental Law from any Governmental Entity with
respect to any actual or alleged environmental contamination, except,
in each case, for communications, environmental remediation and
investigations and requests for information which would not,
individually or in the aggregate, have a material adverse effect;
(ii) since December 31, 1996, the Company has not
received any written communication from any person or entity
(including any Governmental Entity) stating or alleging that the
Company may have violated any Environmental Law, or that the Company
has caused or contributed to any environmental contamination that has
caused any property damage or personal injury under Environmental Law,
except, in each case, for statements and allegations of violations and
statements and allegations of responsibility for property damage and
personal injury which would not, individually or in the aggregate,
have a material adverse effect; and
(iii) all underground storage tanks ("UST's") on
property currently owned by the Company comply with applicable
Environmental Law, except for UST's which would not, individually or
in the aggregate, have a material adverse effect.
(b) For purposes of this Section 3.13, "Environmental Law"
means all applicable state, federal and local laws, regulations and rules,
including common law, judgments, decrees and orders relating to pollution,
the preservation of the environment, and the release of materials into the
environment.
Section 3.14 Information in Schedule 14D-1. None of the
information supplied or to be supplied by the Company in writing
specifically for inclusion in the Schedule 14D-1, at the time such document
is first published, sent or given will at the date it is first mailed to
the Company's shareholders, 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.
Section 3.15 Compliance with Laws. Except as set forth on
Schedule 3.15 or as disclosed in the SEC Documents, neither the Company nor
any Subsidiary is in violation of, or has violated, any law, statute,
ordinance, rule, regulation, arbitral determination, order, writ, decree or
injunction that is applicable to or binding upon the Company, any
Subsidiary or any of their respective properties, other than in each case
such violations that, individually or in the aggregate, have not had a
material adverse effect on the Company and its Subsidiaries taken as a
whole.
Section 3.16 HSR Approval. The Company has filed a premerger
notification and report form under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act") with respect to the
acquisition of the Company by Parent. The applicable waiting period under
the HSR Act has expired.
Section 3.17 Precious Metals Inventories. Schedule 3.17 sets
forth the aggregate net amount of fine ounces of gold, silver, palladium
and platinum owned by the Company and its wholly-owned Subsidiaries as of
February 27, 1998 assuming such precious metals were reduced or refined to
a fine ounce basis.
Section 3.18 Opinion of Financial Advisor. The Company has
received the opinion of Xxxxxxx, Sachs & Co. (the "Fairness Opinion") to
the effect that, as of the date thereof, the Merger Consideration to be
received by the Company's shareholders pursuant to this Agreement is fair
to the Company's shareholders (other than Parent and the Purchaser) from a
financial point of view, a copy of which opinion will be made available to
Parent.
Section 3.19 Voting Requirements. The affirmative vote of the
holders of 66 2/3% of the voting power of all outstanding Shares, voting as
a single class, at the Company's Stockholders Meeting to adopt this
Agreement is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve and adopt this Agreement and
the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and
warrant to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite
corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority,
and governmental approvals would not have a material adverse effect on
Parent and its Subsidiaries taken as a whole. Parent and the Purchaser are
duly qualified or licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not, in the aggregate, have a material
adverse effect on Parent and its Subsidiaries, taken as a whole.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and the Purchaser has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance
by Parent and the Purchaser of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by their Boards
of Directors and no other corporate action on the part of Parent and the
Purchaser is necessary to authorize the execution and delivery by Parent
and the Purchaser of this Agreement and the consummation by them of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by Parent and the Purchaser, as the case may be, and,
assuming due and valid authorization, execution and delivery hereof by the
Company, is a valid and binding obligation of each of Parent and the
Purchaser, as the case may be, enforceable against them in accordance with
its respective terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
Section 4.3 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state or
foreign laws relating to takeovers, state securities or blue sky laws, the
NYBCL, the laws of other states in which Parent or the Purchaser is
qualified to do or is doing business, neither the execution, delivery or
performance of this Agreement by Parent and the Purchaser nor the
consummation by Parent and the Purchaser of the transactions contemplated
hereby nor compliance by Parent and the Purchaser with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the respective certificate of incorporation or by-laws or
similar organizational documents of Parent, any of its subsidiaries or the
Purchaser, (ii) require on the part of Parent or the Purchaser any filing
with, or permit, authorization, consent or approval of, any Governmental
Entity, except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not have a material
adverse effect on Parent and its Subsidiaries taken as a whole, (iii)
result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
Parent, any of its Subsidiaries or the Purchaser is a party or by which any
of them or any of their properties or assets may be bound or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable
to Parent, any of its Subsidiaries or the Purchaser or any of their
properties or assets, excluding from the foregoing clauses (iii) or (iv)
such violations, breaches or defaults which would not, individually or in
the aggregate, have a material adverse effect on Parent, its Subsidiaries
or the Purchaser taken as a whole and will not materially impair the
ability of Parent or the Purchaser to consummate the transactions
contemplated hereby.
Section 4.4 Information in Proxy Statement; Schedule 14D-9.
None of the information supplied by Parent or the Purchaser for inclusion
or incorporation by reference in the Proxy Statement or the Schedule 14D-9
will, at the date mailed to shareholders and at the time of the meeting of
shareholders to be held in connection with the Merger, 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.
Section 4.5 Financing. Either Parent or the Purchaser has
sufficient funds available (through cash on hand and existing credit
arrangements or otherwise) to purchase all of the Shares outstanding on a
fully diluted basis, to repay all amounts outstanding under the Credit
Agreement and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 4.6 Share Ownership. Except as set forth in the
Statement on Schedule 13D of Parent and the Purchaser dated January 26,
1998, Parent and the Purchaser do not beneficially own any Shares. Parent
and the Purchaser will not sell, transfer or otherwise dispose of any of
the Shares beneficially owned by them so long as this Agreement is in
effect, except transfers to a direct or indirect wholly owned subsidiary of
Parent.
Section 4.7 Purchaser's Operations. The Purchaser has not
engaged in any business activities or conducted any operations other than
in connection with the transactions contemplated hereby or as disclosed in
the Tender Offer Statement of the Purchaser dated December 16, 1997.
Section 4.8 HSR Approval. Parent and the Purchaser have filed a
premerger notification and report form under the HSR Act with respect to
their acquisition of the Company. The applicable waiting period under the
HSR Act has expired.
Section 4.9 Investigation by Parent and Purchaser. Each of
Parent and the Purchaser:
(a) acknowledge that, other than as set forth in this Agreement,
none of the Company, its Subsidiaries or any of their respective directors,
officers, employees, affiliates, agents or representatives makes any
representation or warranty, either express or implied, as to the accuracy
or completeness of any of the information provided or made available to
Parent or the Purchaser or its agents or representatives prior to the
execution of this Agreement, and
(b) agrees, to the fullest extent permitted by law (except with
respect to claims of fraud), that none of the Company, its Subsidiaries or
any of their respective directors, officers, employees, stockholders,
affiliates, agents or representatives shall have any liability or
responsibility whatsoever to Parent or the Purchaser on any basis
(including without limitation in contract, tort or otherwise) based upon
any information provided or made available, or statements made, to Parent
or the Purchaser prior to the execution of this Agreement.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as contemplated by this Agreement, or
(ii) as agreed in writing by Parent, after the date hereof, and prior to
the time the directors of the Purchaser have been elected to, and shall
constitute a majority of, the Board of Directors of the Company pursuant to
Section 1.3 (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall
be conducted only in the ordinary and usual course of business;
(b) the Company will not, directly or indirectly, (i) sell,
transfer or pledge or agree to sell, transfer or pledge any Company Common
Stock or capital stock of any of its Subsidiaries beneficially owned by it,
either directly or indirectly; (ii) amend its Certificate of Incorporation
or By-laws or similar organizational documents; or (iii) split, combine or
reclassify the outstanding Company Common Stock or any outstanding capital
stock of any of the Subsidiaries of the Company;
(c) except for those actions contemplated in Section 1.2,
neither the Company nor any of its Subsidiaries shall: (i) declare, set
aside or pay any dividend or other distribution payable in cash, stock or
property with respect to its capital stock except for its regular quarterly
cash dividend on the Company Common Stock; (ii) issue, sell, pledge,
dispose of or encumber any additional shares of, or securities convertible
into or exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of capital stock of any class of
the Company or its Subsidiaries, other than shares of Common Stock reserved
for issuance on the date hereof upon exercise of outstanding Rights
pursuant to the Rights Agreement or issuances pursuant to the exercise of
Options outstanding on the date hereof; (iii) transfer, lease, license,
sell, mortgage, pledge, dispose of, or encumber any material assets other
than in the ordinary and usual course of business and consistent with past
practice including, without limitation, any transfer or sale of any
precious metal inventories set forth on Schedule 3.17, except in the
ordinary course of business consistent with past practice, it being
understood that any permanent reduction, liquidation or increase in the
Company's precious metals inventory position will not be made without
Parent's consent; (iv) incur or modify any material indebtedness or other
material liability, other than in the ordinary and usual course of business
and consistent with past practice, provided that the Company may borrow
money for use in the ordinary and usual course of business; or (v) redeem,
purchase or otherwise acquire directly or indirectly any of its capital
stock other than redemption of the outstanding Rights pursuant to the
Rights Agreement;
(d) neither the Company nor any of its Subsidiaries shall
modify, amend or terminate any of its Material Agreements or waive, release
or assign any material rights or claims, except in the ordinary course of
business and consistent with past practice;
(e) neither the Company nor any of its Subsidiaries shall
permit any material insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated without notice to Parent,
except in the ordinary course of business and consistent with past
practice;
(f) neither the Company nor any of its Subsidiaries shall:
(i) assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the material obligations
of any other person, except in the ordinary course of business and
consistent with past practice; (iii) make any material loans, advances or
capital contributions to, or investments in, any other person (other than
to Subsidiaries of the Company), other than in the ordinary course of
business and consistent with past practice; or (iv) enter into any material
commitment or transaction with respect to any of the foregoing (including,
but not limited to, any borrowing, capital expenditure or purchase, sale or
lease of assets);
(g) neither the Company nor any of its Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP;
(h) except as permitted in connection with the termination
of this Agreement pursuant to Section 7.1(c)(i), neither the Company nor
any of its Subsidiaries will adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
Subsidiaries (other than the Merger);
(i) neither the Company nor any of its Subsidiaries will,
except as required by law, enter into, adopt, create or amend in any
material respect or terminate any benefit plans maintained or contributed
to by the Company or any of its Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will
make or agree to make any capital expenditure or capital expenditures other
than capital expenditures in accordance with the Company's 1998 capital
expenditure program or in the ordinary course of business consistent with
past practice;
(k) neither the Company nor any of its Subsidiaries will
increase the compensation of any director, executive officer or other key
employee of the Company or pay any benefit or amount not required by a
plan, agreement, understanding or arrangement as in effect on the date of
this Agreement to any such person;
(l) neither the Company nor any of its Subsidiaries will
cause a material change in investment policy or a material change in
investment vehicles related to the assets in any pension plan, other than
actions taken in the ordinary course of business or that are consistent
with or required by its fiduciary duties;
(m) neither the Company nor any of its Subsidiaries will
take, or agree to commit to take, any action that would make any
representation or warranty of the Company contained herein inaccurate in
any material respect at, or as of any time prior to, the Effective Time
(except for representations made as of a specific date); or
(n) neither the Company nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 5.2 Approvals and Consents; Cooperation. The parties
hereto shall use reasonable efforts, and cooperate with each other, to
obtain all governmental and third party authorizations, approvals, consents
or waivers required in order to consummate the Offer and the Merger. Each
of the parties hereto agrees to use its reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate the Offer and the Merger. The
Company further agrees to use its reasonable efforts to seek to obtain, in
connection with Parent and without cost to the Company, any consent of a
third party on Schedule 3.4 required to avoid a default or breach of any
such contract resulting from this Agreement, the Offer or the Merger,
including without limitation the Credit Agreement and the Note Agreement.
Section 5.3 Actions Regarding the Rights. The Company, in
accordance with the terms and provisions of the Rights Agreement, shall
take all reasonable actions necessary to cause the postponement of the
Distribution Date under the Rights Agreement as necessary to prevent this
Agreement or the consummation of any of the transactions contemplated
hereby, including without limitation, the publication or other announcement
of the Offer and the consummation of the Offer and the Merger, from
resulting in the distribution of separate Rights certificates or the
occurrence of a Distribution Date or being deemed a Triggering Event (as
defined in the Rights Agreement). The Company's Board of Directors will
take all further action (in addition to that referred to in Section 1.2(d))
reasonably requested in writing by Parent in order to render the Rights
inapplicable to the Offer and the Merger and the other transactions
contemplated hereby to the extent provided herein and in the Amendment to
the Rights Plan contemplated by Section 1.2(d). So long as this Agreement
is in effect, the Company will not amend the Rights Agreement without
Parent's prior consent.
Section 5.4 Access to Information. Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, access, during normal business hours during the
period prior to the Appointment Date, to all its properties, books,
contracts, commitments and records and, during such period, the Company
shall (and shall cause each of its Subsidiaries to) furnish promptly to the
Parent (a) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of federal securities laws and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. After the Appointment Date the Company shall provide Parent and
such persons as Parent shall designate with all such information, at such
time, as Parent shall request. Unless otherwise required by law and until
the Appointment Date, Parent will hold any such information which is
nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreement between the Company and Parent, dated February
28, 1998 (the "Confidentiality Agreement").
Section 5.5 Repayment of Borrowings Under Credit Agreement. At
the Closing, unless the Company shall have obtained the lenders' consent to
the Merger and a waiver of the change in control provision in the Credit
Agreement, Parent shall repay all outstanding borrowings under the Credit
Agreement in accordance with the terms thereof (through Parent's cash on
hand, existing credit arrangements or otherwise) such that no event of
default will exist as a result of the consummation of the transactions
contemplated hereby.
Section 5.6 Consents and Approvals. Each of the Company, Parent
and the Purchaser will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with
respect to this Agreement and the transactions contemplated hereby (which
actions shall include, without limitation, furnishing all information in
connection with approvals of or filings with any Governmental Entity) and
will promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of
their Subsidiaries in connection with this Agreement and the transactions
contemplated hereby. Each of the Company, Parent and the Purchaser will,
and will cause its Subsidiaries to, take all reasonable actions necessary
to obtain (and will cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity or other public or private third party required to be obtained or
made by Parent, the Purchaser, the Company or any of their Subsidiaries in
connection with the Merger or the taking of any action contemplated thereby
or by this Agreement.
Section 5.7 Employee Benefits.
(a) Parent and the Purchaser shall, as of the Effective
Time, continue the employment of all persons who, immediately prior to the
Effective Time, were employees of the Company or its Subsidiaries
("Retained Employees"). Parent and the Purchaser agree that, effective as
of the Effective Time and for a three-year period following the Effective
Time, the Surviving Corporation and its Subsidiaries and successors shall
provide the Retained Employees with employee plans and programs which
provide benefits that are no less favorable in the aggregate to those
provided to such Retained Employees immediately prior to the date hereof.
With respect to such benefits, service accrued by such Retained Employees
during employment with the Company and its Subsidiaries prior to the
Effective Time shall be recognized for all purposes, except to the extent
necessary to prevent duplication of benefits. Nothing in this Section
5.7(a) shall be deemed to require the employment of any Retained Employee
to be continued for any particular period of time after the Effective Time.
(b) Parent and the Purchaser agree to honor, and cause the
Surviving Corporation to honor, without modification, all employment and
severance agreements and arrangements, as amended through the date hereof,
with respect to employees and former employees of the Company, including
the Employee Agreements referred to in Section 3.8(a) hereof (collectively,
the "Severance Agreements"), all Supplemental Retirement and Death Benefit
Agreements, as amended through the date hereof, between the Company and
certain officers (collectively, "Retirement Agreements") and any other
Benefit Plan, agreement or arrangement which provides for the payment or
acceleration of benefits to employees of the Company upon a change in
control of the Company. Parent and the Purchaser acknowledge that the
consummation of transactions contemplated hereby (including the Offer)
shall constitute a "change in control" for purposes of this Section 5.7(b)
and the Severance Agreements, Retirement Agreements and other agreements
referred to herein. If any payments are required to be made under any
employment or severance agreement or arrangement, as amended through the
date hereof, with respect to employees and former employees of the Company
(including the Employee Agreements and Severance Agreements referred to in
Section 3.8 or 5.7 hereof), as a result of the consummation of the
transactions contemplated hereby, such payments shall be made on the date
on which the Shares are accepted for payment pursuant to the Offer.
(c) Parent and the Purchaser agree that at or prior to the
Effective Time, the Board of Directors of the Company (or the Compensation
Committee thereof) after consultation with the Chief Executive Officer of
the Company, may allocate to officers and employees of the Company and its
Subsidiaries the 1998 Bonus Pool (as defined below) in a manner consistent
with past practice, and, to the extent payments in respect of such
allocated amounts have not been made prior to the Effective Time, Parent
and the Purchaser agree to make payments, or to cause the Surviving
Corporation to make payments, in respect of such allocated amounts within
five days after the Effective Time. The amount of the "1998 Bonus Pool"
shall equal the aggregate amount of bonuses paid in respect of the
Company's 1997 fiscal year under the Company's Management Incentive Plan
multiplied by a fraction, the numerator of which is the number of days
which have elapsed during fiscal 1998 and the denominator of which is 365.
(d) In the event Parent or the Purchaser or the Surviving
Corporation or any of their successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfers or
conveys all or substantially all of its properties and assets to any
person, then, and in each such case, to the extent necessary to effectuate
the purposes of this Section 5.7, proper provision shall be made so that
the successors and assigns of Parent, the Purchaser or the Surviving
Corporation, as the case may be, assume the obligations set forth in this
Section 5.7 and none of the actions described in clauses (i) or (ii) shall
be taken until such provision is made.
Section 5.8 No Solicitation. Neither the Company, any of its
Subsidiaries or affiliates nor its officers, directors or affiliates, shall
directly or indirectly, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation,
partnership, person or other entity or group (other than Parent, any of its
affiliates or representatives) concerning any merger, consolidation, tender
offer, exchange offer, sale of all or substantially all of the Company's
assets, sale of shares of capital stock or similar business combination
transactions involving the Company or any principal operating or business
unit of the Company (an "Acquisition Proposal"); provided, however, that
if, at any time prior to the purchase of Shares by Purchaser in the Offer,
the Company's Board of Directors determines in good faith, after receiving
formal advice from its financial advisor and outside counsel, that such
action is reasonably necessary for the Company Board to comply with its
fiduciary duties to the Company's shareholders under applicable law, the
Company may, in response to a bona fide written Acquisition Proposal which
did not result from a breach of this Section 5.8 and which the Board
determines is superior to the Offer and which in the event of an all or
part cash transaction is not subject to financing (any such bona fide
written Acquisition Proposal being referred to as a "Superior Proposal"),
(i) furnish information or provide access with respect to the Company and
each of its Subsidiaries to such Person pursuant to a customary
confidentiality agreement (as determined by the Company after consultation
with its outside counsel) and (ii) participate in discussions and
negotiations regarding such Acquisition Proposal. In the event that prior
to the completion of the Offer, the Company's Board of Directors determines
in good faith, after the Company has received a Superior Proposal and after
consultation with its financial advisor and outside counsel, that it is
reasonably necessary to do so in order to comply with its fiduciary duties
to the Company's shareholders under applicable law, the Company's Board of
Directors may withdraw or modify its approval or recommendation of the
Offer, the Merger or this Agreement, approve or recommend a Superior
Proposal or terminate this Agreement, provided that prior to any such
termination, the Company shall (i) have given Parent at least two business
days notice of the effectiveness of such termination, and (ii)
simultaneously with the termination of this Agreement, pay to Parent the
termination fee referred to in Section 7.3 hereof. Furthermore, nothing
contained in this Section 5.8 shall prohibit the Company or its Board of
Directors from taking and disclosing to the Company's shareholders a
position with respect to a tender or exchange offer by a third party
pursuant to Rules l4d-9 and l4e-2(a) promulgated under the Exchange Act or
from making such disclosure to the Company's shareholders or otherwise
which, in the judgment of the Board of Directors with the advice of
independent legal counsel, may be required under applicable law or rules of
any stock exchange.
Section 5.9 Brokers or Finders. (a) The Company represents, as
to itself, its Subsidiaries and its affiliates, that no agent, broker,
investment banker, financial advisor or other firm or person is or will be
entitled to any brokers' or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this
Agreement, except Xxxxxxx, Xxxxx & Co., whose fees and expenses will be
paid by the Company in accordance with the Company's agreement with such
firm, which agreement has been summarized in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9, dated December 24,
1997; and the Company agrees to indemnify and hold Parent and the Purchaser
harmless from and against any and all claims, liabilities or obligations
with respect to any other fees, commissions or expenses asserted by any
person on the basis of any act or statement alleged to have been made by
such party or its affiliates.
(b) Parent represents, as to itself, its Subsidiaries and
its affiliates, that no agent, broker, investment banker, financial advisor
or other firm or person is or will be entitled to any brokers' or finders'
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, except Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, whose fees and expenses will be paid by
Parent in accordance with the Parent's agreement with such firm; and Parent
agrees to indemnify and hold the Company harmless from and against any and
all claims, liabilities or obligations with respect to any other fees,
commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliates.
Section 5.10 Publicity. The initial press release with respect
to the execution of this Agreement shall be a joint press release
reasonably acceptable to Parent and the Company. Thereafter, so long as
this Agreement is in effect, neither the Company, Parent nor any of their
respective affiliates shall issue or cause the publication of any press
release or other announcement with respect to the Merger, this Agreement or
the other transactions contemplated hereby without the prior consultation
of the other party, except as may be required by law or by any listing
agreement with a national securities exchange.
Section 5.11 Notification of Certain Matters. The Company shall
give prompt notice to Parent and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence of any event the
occurrence, or non-occurrence of which would cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time and (ii) any material
failure of the Company or Parent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.11 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 5.12 Directors' and Officers' Insurance and
Indemnification. (a) From and after the consummation of the Offer, Parent
shall, and shall cause the Surviving Corporation to, indemnify, defend and
hold harmless any person who is now, or has been at any time prior to the
date hereof, or who becomes prior to the Effective Time, an officer or
director (the "Indemnified Party") of the Company and its Subsidiaries
against all losses, claims, damages, liabilities, costs and expenses
(including attorneys' fees and expenses), judgments, fines, losses, and
amounts paid in settlement in connection with any actual or threatened
action, suit, claim, proceeding or investigation (each a "Claim") to the
extent that any such Claim is based on, or arises out of, (i) the fact that
such person is or was a director, officer, employee or agent of the Company
or any Subsidiaries or is or was serving at the request of the Company or
any of its Subsidiaries as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
or (ii) this Agreement, or any of the transactions contemplated hereby, in
each case to the extent that any such Claim pertains to any matter or fact
arising, existing, or occurring prior to or at the Effective Time,
regardless of whether such Claim is asserted or claimed prior to, at or
after the Effective Time, to the full extent permitted under New York law
or the Company's Certificate of Incorporation, By-laws or indemnification
agreements in effect at the date hereof, including provisions relating to
advancement of expenses incurred in the defense of any action or suit.
Without limiting the foregoing, in the event any Indemnified Party becomes
involved in any capacity in any Claim, then from and after consummation of
the Offer Parent shall, or shall cause the Company (or the Surviving
Corporation if after the Effective Time) to, periodically advance to such
Indemnified Party its legal and other expenses (including the cost of any
investigation and preparation incurred in connection therewith), subject to
the provision by such Indemnified Party of an undertaking to reimburse the
amounts so advanced in the event of a final non-appealable determination by
a court of competent jurisdiction that such Indemnified Party is not
entitled thereto.
(b) Parent and the Company agree that all rights to
indemnification and all limitations or liability existing in favor of the
Indemnified Party as provided in the Company's Certificate of Incorporation
and By-laws as in effect as of the date hereof shall survive the Merger and
shall continue in full force and effect, without any amendment thereto, for
a period of six years from the Effective Time to the extent such rights are
consistent with the NYBCL; provided that, in the event any claim or claims
are asserted or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims; provided further, that any
determination required to be made with respect to whether an Indemnified
Party's conduct complies with the standards set forth under New York law,
the Company's Certificate of Incorporation or By-laws or such agreements,
as the case may be, shall be made by independent legal counsel selected by
the Indemnified Party and reasonably acceptable to Parent and; provided
further, that nothing in this Section 5.12 shall impair any rights or
obligations of any present or former directors or officers of the Company.
(c) In the event Parent or the Purchaser or any of their
successors or assigns (i) consolidates with or merges into any other person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such
case, to the extent necessary to effectuate the purposes of this Section
5.12, proper provision shall be made so that the successors and assigns of
Parent and the Purchaser assume the obligations set forth in this Section
5.12 and none of the actions described in clauses (i) or (ii) shall be
taken until such provision is made.
(d) Parent or the Surviving Corporation shall maintain the
Company's existing officers' and directors' liability insurance policy
("D&O Insurance") for a period of not less than six years after the
Effective Date; provided, that the Parent may substitute therefor policies
of substantially similar coverage and amounts containing terms no less
advantageous to such former directors or officers; provided, further, if
the existing D&O Insurance expires or is cancelled during such period,
Parent or the Surviving Corporation will use their best efforts to obtain
substantially similar D&O Insurance; provided, however, that if the
aggregate annual premiums for such insurance at any time during such period
exceed 200% of the per annum rate of premiums currently paid by the Company
and its Subsidiaries for such insurance on the date of this Agreement, then
Parent will cause the Surviving Corporation to, and the Surviving
Corporation will, provide the maximum coverage that shall then be available
at an annual premium equal to 200% of such rate.
Section 5.13 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. If at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the parties hereto shall take or cause to be
taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reasonably requested by the other party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions:
(a) Shareholder Approval. This Agreement shall have been
approved and adopted by the requisite vote of the holders of Company Common
Stock, if required by applicable law and the Certificate of Incorporation,
in order to consummate the Merger;
(b) Statutes; Consents. No statute, rule, order, decree or
regulation shall have been enacted or promulgated by any foreign or
domestic Governmental Entity or authority of competent jurisdiction which
prohibits the consummation of the Merger and all foreign or domestic
governmental consents, orders and approvals required for the consummation
of the Merger and the transactions contemplated hereby shall have been
obtained and shall be in effect at the Effective Time;
(c) Injunctions. There shall be no order or injunction of
a foreign or United States federal or state court or other governmental
authority of competent jurisdiction in effect precluding, restraining,
enjoining or prohibiting consummation of the Merger; and
(d) Purchase of Shares in Offer. Parent, the Purchaser or
their affiliates shall have purchased shares of Company Common Stock
pursuant to the Offer.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after shareholder approval thereof:
(a) By the mutual consent of the Board of Directors of
Parent and the Board of Directors of the Company.
(b) By either of the Board of Directors of the Company or
the Board of Directors of Parent:
(i) if shares of Company Common Stock shall not have
been purchased pursuant to the Offer on or prior to July 1, 1998;
provided, however, that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of Parent or the Purchaser, as
the case may be, to purchase shares of Company Common Stock pursuant
to the Offer on or prior to such date; or
(ii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their
reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall
have become final and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of the
Company shall have (A) withdrawn, or modified or changed in a manner
adverse to Parent or the Purchaser its approval or recommendation of
the Offer, this Agreement or the Merger in order to approve and permit
the Company to execute an agreement relating to a Superior Proposal,
and (B) determined in good faith, after consultation with independent
legal counsel to the Company, that the failure to take such action as
set forth in the preceding clause (A) would be inconsistent with its
fiduciary duties to the Company's shareholders under applicable law,
provided, however, that prior to any such termination the Company
shall (i) have given Parent at least two business days notice of the
effectiveness of such termination, and (ii) simultaneously with the
effectiveness of such termination, pay to Parent the termination fee
referred to in Section 7.3; or
(ii) if, prior to the purchase of Company Common Stock
pursuant to the Offer, Parent or the Purchaser breaches or fails in
any material respect to perform or comply with any of its material
covenants and agreements contained herein or breaches its
representations and warranties in any material respect; or
(iii) if Parent or the Purchaser shall have terminated
the Offer, or the Offer shall have expired, without Parent or the
Purchaser, as the case may be, purchasing any shares of Company Common
Stock pursuant thereto; provided that the Company may not terminate
this Agreement pursuant to this Section 7.1(c)(iii) if the Company is
in material breach of this Agreement; or
(iv) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to satisfy any
of the conditions set forth in Annex A hereto, Parent, the Purchaser
or any of their affiliates shall have failed to commence the Offer on
or prior to five business days following the date of the initial
public announcement of the Offer; provided, that the Company may not
terminate this Agreement pursuant to this Section 7.1(c)(iv) if the
Company is in material breach of this Agreement.
(d) By the Board of Directors of Parent:
(i) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to satisfy any
of the conditions set forth in Annex A hereto, Parent, the Purchaser,
or any of their affiliates shall have failed to commence the Offer on
or prior to five business days following the date of the initial
public announcement of the Offer; provided that Parent may not
terminate this Agreement pursuant to this Section 7.1(d)(i) if Parent
is in material breach of this Agreement; or
(ii) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of the
Company shall have withdrawn, or modified or changed in a manner
adverse to Parent or the Purchaser its approval or recommendation of
the Offer, this Agreement or the Merger or shall have recommended an
Acquisition Proposal or shall have executed an agreement in principle
(or similar agreement) or definitive agreement relating to an
Acquisition Proposal or similar business combination with a person or
entity other than Parent, the Purchaser or their affiliates (or the
Board of Directors of the Company resolves to do any of the
foregoing).
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice
thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void, and there shall be no
liability on the part of the Parent or the Company except for fraud or for
willful breach of this Agreement.
Section 7.3 Termination Fee. In the event that the Board of
Directors of the Company terminates this Agreement pursuant to Section
7.1(c)(i) or Parent terminates this Agreement pursuant to Section
7.1(d)(ii) (provided that at the time of such termination by Parent, Parent
and the Purchaser were not in material breach of this Agreement), the
Company shall concurrently pay to Parent a termination fee of $8 million.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and
all respects, whether before or after any vote of the shareholders of the
Company contemplated hereby, by written agreement of the parties hereto, by
action taken by their respective Boards of Directors (which in the case of
the Company shall include approvals as contemplated in Section 1.3(b)), at
any time prior to the Closing Date with respect to any of the terms
contained herein; provided, however, that after the approval of this
Agreement by the shareholders of the Company, no such amendment,
modification or supplement shall reduce or change the Merger Consideration.
Section 8.2 Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall
survive the Effective Time.
Section 8.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or sent by an overnight courier
service, such as Federal Express, 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 the Purchaser, to:
WHX Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Tabin
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx
LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq. and
Xxxxxx Xxxxxxx, Esq.
and
(b) if to the Company, to:
Handy & Xxxxxx
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: General Counsel
and
Handy & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Section 8.4 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include",
"includes" or "including" are used in this Agreement they shall be deemed
to be followed by the words "without limitation". The phrase "made
available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information
is to be made available. The phrases "the date of this Agreement", "the
date hereof", and terms of similar import, unless the context otherwise
requires, shall be deemed to refer to March 1, 1998. As used in this
Agreement, the term "affiliate(s)" shall have the meaning set forth in Rule
l2b-2 of the Exchange Act.
Section 8.5 Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have
been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (including the documents and
the instruments referred to herein and therein): (a) constitutes the
entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, and (b) except as provided in Sections 2.4, 4.8, 5.7 and 5.12, are
not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
Section 8.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
Section 8.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
Section 8.9 Jurisdiction. Any legal action or proceeding with
respect to this Agreement or any matters arising out of or in connection
with this Agreement or otherwise, and any action for enforcement of any
judgment in respect thereof shall be brought exclusively in the courts of
the State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Company, Parent and the Purchaser each hereby accepts for itself and in
respect of its property, generally and unconditionally, the exclusive
jurisdiction of the aforesaid courts and appellate courts thereof. The
Company, Parent and the Purchaser irrevocably consent to service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, or by recognized international express carrier or delivery
service, to the Company, Parent or the Purchaser at their respective
addresses referred to in Section 8.3 hereof. In addition, each of Parent
and the Purchaser hereby designates Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
as its respective agent for service of process, and service upon Parent or
the Purchaser shall be deemed to be effective upon service of Xxxxxx
Xxxxxxxx Frome & Xxxxxxxxxx LLP as aforesaid or of its successor designated
in accordance with the following sentence. Parent or the Purchaser may
designate another corporate agent or law firm reasonably acceptable to the
Company and located in the Borough of Manhattan, in the City of New York,
as successor agent for service of process upon 30-days prior written notice
to the Company. The Company, Parent and the Purchaser each hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or otherwise brought in the courts
referred to above and hereby further irrevocably waives and agrees, to the
extent permitted by applicable law, not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of
any party hereto to serve process in any other manner permitted by law.
Section 8.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the Purchaser may assign,
in its sole discretion, any or all of its rights, interests and obligations
hereunder to Parent or to any direct or indirect wholly owned Subsidiary of
Parent. 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.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
HANDY & XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
WHX CORPORATION
By: /s/ Xxxxxx XxXxx
Name: Xxxxxx XxXxx
Title: Chairman
HN ACQUISITION CORP.
By: /s/ Xxxxxx XxXxx
Name: Xxxxxx XxXxx
Title: President
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, and in
addition to (and not in limitation of) the Purchaser's rights to extend and
amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), the Purchaser 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 the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above,
the payment for, any tendered Shares, and may terminate the Offer if (i)
the Minimum Condition has not been satisfied, (ii) the Rights under the
Rights Agreement shall have become exercisable, or (iii) at any time on or
after March 1, 1998 and before the time of acceptance of Shares for payment
pursuant to the Offer, any of the following events shall occur:
(a) there shall have been any action taken, or any statute,
rule, regulation, judgment, order or injunction promulgated, entered,
enforced, enacted, issued or applicable to the Offer or the Merger by any
domestic or foreign federal or state governmental regulatory or
administrative agency or authority or court or legislative body or
commission which (l) prohibits, or imposes any material limitations on,
Parent's or the Purchaser's ownership or operation of all or a material
portion of the Company's businesses or assets, (2) prohibits, or makes
illegal the acceptance for payment, payment for or purchase of Shares or
the consummation of the Offer or the Merger, (3) results in a material
delay in or restricts the ability of the Purchaser, or renders the
Purchaser unable, to accept for payment, pay for or purchase some or all of
the Shares, or (4) imposes material limitations on the ability of the
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's
shareholders, provided that Parent shall have used all reasonable efforts
to cause any such judgment, order or injunction to be vacated or lifted;
(b) the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct as of the date
of consummation of the Offer as though made on or as of such date or the
Company shall have breached or failed to perform or comply with any
material obligation, agreement or covenant required by the Merger Agreement
to be performed or complied with by it except, in each case, (i) for
changes specifically permitted by the Merger Agreement and (ii) (A) those
representations and warranties that address matters only as of a particular
date which are true and correct as of such date or (B) where the failure of
such representations and warranties to be true and correct, or the
performance or compliance with such obligations, agreements or covenants,
do not, individually or in the aggregate, have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(c) the Merger Agreement shall have been terminated in
accordance with its terms;
(d) (i) it shall have been publicly disclosed that any
person, entity or "group" (as defined in Section 13(d)(3) of the Exchange
Act), shall have acquired beneficial ownership (determined pursuant to Rule
13d-3 promulgated under the Exchange Act) of more than 20% 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, other than any
person or group existing on the date hereof which beneficially owns more
than 20% of any class or series of capital stock of the Company or (ii) the
Company shall have entered into a definitive agreement or agreement in
principle with any person with respect to an Acquisition Proposal or
similar business combination with the Company;
(e) the Company's Board of Directors shall have withdrawn,
or modified or changed in a manner adverse to Parent or the Purchaser
(including by amendment of the Schedule 14D-9) its recommendation of the
Offer, the Merger Agreement, or the Merger, or recommended another proposal
or offer, or shall have resolved to do any of the foregoing; or
(f) there shall have occurred (i) a decline of at least 25%
in either the Dow Xxxxx Average of Industrial Stocks or the Standard &
Poor's 500 Index from the date of the Merger Agreement, or (ii) the
declaration and continuation of a banking moratorium or any limitation or
suspension of payments in respect of the extension of credit by banks or
other lending institutions in the United States;
which in the reasonable judgment of Parent or the Purchaser, in any such
case, and regardless of the circumstances giving rise to such condition,
makes it inadvisable to proceed with the Offer and/or with such acceptance
for payment or payments.
The foregoing conditions are for the sole benefit of the
Purchaser and Parent and may be waived by Parent or the Purchaser, in whole
or in part at any time and from time to time in the reasonable discretion
of Parent or the Purchaser.
ANNEX B
AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT, dated as of March 1, 1998, to the Rights Agreement,
dated as of January 26, 1989, as amended as of April 25, 1996 and October
22, 1996 (the "Rights Agreement"), between Handy & Xxxxxx, a New York
corporation (the "Company"), and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement specifying the terms of the Rights (as defined therein); and
WHEREAS, the Company and the Rights Agent desire to amend the
Rights Agreement in accordance with Section 26 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth in the Rights Agreement and this Amendment, the
parties hereby agree as follows:
1. Section 1(a) is amended by adding the following at the end of
said Section:
; provided, further, that none of WHX Corporation, a Delaware
corporation ("WHX"), HN Acquisition Corp., a New York corporation and
wholly-owned subsidiary of WHX (the "Purchaser") and their Affiliates
(the "WHX Persons") shall be deemed to be an Acquiring Person by
virtue of (x) the execution of the Agreement and Plan of Merger, dated
as of March 1, 1998 (the "Merger Agreement," which term shall include
any amendments thereto) by and among WHX, the Purchaser and the
Company, or (y) the consummation of any of the transactions
contemplated thereby, including, without limitation, the publication
or other announcement of the Offer (as defined therein), the
consummation of the Offer and the Merger (as defined therein)(the
items set forth in (x) and (y) are referred to herein as the "WHX
Transactions").
2. Section 1(j) is amended by adding the following at the end of
said Section:
; provided, however, that the public announcement of any of the
WHX Transactions shall not constitute a Stock Acquisition Date.
3. Section 1(l) is amended by adding the following at the end of
said Section:
Notwithstanding anything to the contrary contained in this
Agreement, none of the WHX Transactions shall constitute a Triggering
Event or an event described in Section 11(a)(ii) or Section 13.
4. Section 3(a) is amended by adding the following at the end of
said Section:
Notwithstanding anything to the contrary contained in this
Agreement, neither the announcement nor the consummation of the WHX
Transactions shall constitute or result in the occurrence of a
Distribution Date.
5. The term "Agreement" as used in the Rights Agreement shall be
deemed to refer to the Rights Agreement as amended hereby.
6. The foregoing amendment shall be effective as of the date
first above written, and, except as set forth herein, the Rights Agreement
shall remain in full force and effect and shall be otherwise unaffected
hereby.
7. This Amendment may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of this 1st day of March, 1998.
HANDY & XXXXXX
By: ____________________________
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.,
as Rights Agent
By: ____________________
Name:
Title:
