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EXHIBIT 1.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
AMONG PIERRE FOODS, INC., PF MANAGEMENT, INC.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. AND ▇▇▇▇▇ ▇. ▇▇▇▇▇
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ARTICLE 1 TERMS AND CONDITIONS OF THE EXCHANGE................................................................ 1
1.1 The Exchange................................................................................ 1
1.2 Payment of Cash and Surrender of Share Certificates......................................... 2
1.3 Effects of the Exchange..................................................................... 3
1.4 Closing..................................................................................... 3
1.5 Stock Options and Employee Benefit Plans.................................................... 3
ARTICLE 2 GENERAL CONDITIONS AND AGREEMENTS................................................................... 4
2.1 Effective Time.............................................................................. 4
2.2 Termination................................................................................. 4
2.3 Effect of Termination....................................................................... 6
2.4 Conduct of the Participating Corporations prior to the Effective Time....................... 6
2.5 Conditions to the Exchange.................................................................. 9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................................... 11
3.1 Due Authorization........................................................................... 11
3.2 Consents and Approvals; No Violation........................................................ 11
3.3 SEC Reports................................................................................. 11
3.4 Litigation.................................................................................. 12
3.5 Rights Agreement; Anti-Takeover Laws........................................................ 12
3.6 Fairness Opinion............................................................................ 12
3.7 Board Action................................................................................ 12
3.8 Absence of Certain Changes.................................................................. 12
3.9 Proxy Statement and Transaction Statement Information....................................... 13
3.10 Stock Options............................................................................... 13
3.11 Brokers..................................................................................... 13
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR...................................................... 14
4.1 Organization, Standing and Qualification.................................................... 14
4.2 Authority for this Agreement................................................................ 14
4.3 Consents and Approvals; No Violation........................................................ 14
4.4 Financing................................................................................... 14
4.5 Litigation.................................................................................. 14
4.6 Brokers..................................................................................... 15
4.7 Proxy Statement and Transaction Statement Information....................................... 15
ARTICLE 5 ADDITIONAL AGREEMENTS............................................................................... 15
5.1 Indemnification; Directors and Officers Liability Insurance................................. 15
5.2 Shareholder Approval; Proxy Statement....................................................... 16
5.3 Fees and Expenses........................................................................... 17
5.4 Reasonable Efforts.......................................................................... 17
5.5 Public Announcements; Certain Notices....................................................... 17
5.6 Exemption from Liability Under Section 16(b)................................................ 18
ARTICLE 6 NOTICES............................................................................................. 18
ARTICLE 7 MISCELLANEOUS....................................................................................... 19
7.1 Governing Law............................................................................... 19
7.2 Binding Agreement........................................................................... 19
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7.3 Counterpart Originals....................................................................... 19
7.4 Entire Agreement............................................................................ 19
7.5 Amendments.................................................................................. 19
7.6 Definitions................................................................................. 19
ANNEX A
Articles of Share Exchange between
PF Management, Inc. and Pierre Foods, Inc.................................................................... A-1
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AGREEMENT AND PLAN OF SHARE EXCHANGE
THIS AGREEMENT AND PLAN OF SHARE EXCHANGE (this "Agreement" or the
"Exchange Agreement") is made and entered into as of April 26, 2001, among
Pierre Foods, Inc., a North Carolina corporation (the "Company"), and PF
Management, Inc., a North Carolina corporation (the "Acquiror" and, together
with the Company, the "Participating Corporations"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇, who are the principal shareholders of the Acquiror (the
"Principal Shareholders"), pursuant to Section 55-11-02 of the North Carolina
Business Corporation Act (the "Act").
STATEMENT OF PURPOSE
The respective Boards of Directors of the Participating Corporations
have approved the acquisition of the Company by the Acquiror pursuant to a
statutory share exchange in accordance with the provisions of Section 55-11-02
of the Act (the "Exchange"). In the Exchange, all of the outstanding shares of
common stock, no par value per share, of the Company (the "Common Stock"),
together with the associated preferred stock purchase rights (the "Rights")
issued pursuant to the Rights Agreement, as defined below (the shares of Common
Stock and associated Rights being referred to herein as "Shares"), other than
the Shares already owned by the Acquiror, would, on the terms and subject to the
conditions set forth in this Agreement, be converted into the right to receive
$1.21 per Share.
The Board of Directors of the Company, other than ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Board"), has unanimously adopted resolutions
approving this Agreement and the Exchange. The Board determined that the
Exchange is fair to and in the best interests of the holders of Shares, other
than the Acquiror, and unanimously recommended that the Company's shareholders
approve and adopt this Agreement, including the Plan of Share Exchange set forth
in the Articles of Share Exchange, the form of which is Annex A to this
Agreement (the "Plan").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreement herein contained, the parties agree as
follows:
ARTICLE 1
TERMS AND CONDITIONS OF THE EXCHANGE
1.1 The Exchange. The Acquiror will become the holder of all of
the outstanding Shares pursuant to the terms and conditions of this Agreement
and the Plan. At the Effective Time (as defined in Section 2.1 below), and
subject to the conditions set forth in this Agreement, the shares of the
Participating Corporations shall be exchanged as follows:
(a) Acquiror. The outstanding shares of capital stock of
the Acquiror will not be exchanged, altered or affected in any manner
as a result of the share exchange to be effected pursuant to the Plan
and will remain outstanding as shares of the Acquiror.
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(b) The Company. At the Effective Time, each of the
outstanding Shares of the Company except those already owned by the
Acquiror (the "Exchange Shares") will, by virtue of the share exchange
provided for by the Plan and without any further action on the part of
the holder thereof, be exchanged for, and become the right to receive
from the Acquiror, $1.21 in cash (the "Exchange Price") upon surrender
to the Acquiror (or an agent of the Acquiror designated as provided in
Section 1.2 hereof) of the certificate or certificates representing
such Exchange Shares, as provided in Section 1.2 hereof, and each of
the Exchange Shares shall be cancelled. No interest shall be payable
with respect to payment of such cash amount on surrender of outstanding
certificates. No holder of any Exchange Shares (or any certificate
representing such Exchange Share or Shares) immediately prior to the
Effective Time shall be entitled to receive any dividend declared and
payable in respect of such Exchange Shares after the Effective Time,
any such dividend being the property of the Acquiror. The stock
transfer ledger of the Company shall be closed in respect of the
Exchange Shares from and after the Effective Time.
1.2 Payment of Cash and Surrender of Share Certificates.
(a) At the Effective Time, the Acquiror shall irrevocably
deposit or cause to be deposited with a bank or trust company to be
designated by the Acquiror and reasonably satisfactory to the Company,
which is organized and doing business under the laws of the United
States or any state thereof and has a combined capital and surplus of
at least $100 million, as paying agent for the holders of the Exchange
Shares, cash in the aggregate amount required to effect the conversion
of the Exchange Shares into the consideration to be paid to the
shareholders of the Company as provided in Section 1.1(b) (the
"Aggregate Exchange Consideration"). Pending distribution pursuant to
this Agreement, the Aggregate Exchange Consideration shall be held in
trust for the benefit of the holders of the Exchange Shares and the
funds shall not be used for any other purposes, and the Acquiror and
the Company may direct the paying agent to invest such cash, provided
that such investments (i) shall be obligations of or guaranteed by the
United States of America, commercial paper obligations receiving the
highest rating from either ▇▇▇▇▇'▇ Investor Services, Inc. or Standard
& Poor's Corporation, or certificates of deposit, bank repurchase
agreements or bankers acceptances of domestic and commercial banks with
capital exceeding $250 million or money market funds which are invested
solely in such permitted investments and (ii) shall have maturities
that will not prevent or delay payments to be made pursuant to this
Agreement. Any interest and other income resulting from such
investments shall be paid to the Acquiror.
(b) After the Effective Time, each holder, other than the
Acquiror, of an outstanding certificate or certificates representing
Exchange Shares shall surrender the same to the Acquiror in accordance
with the instructions contained in a form of letter of transmittal. The
letter of transmittal and certificate(s) shall be delivered to the
bank, trust company or other party designated by the Acquiror as paying
agent for the exchange of Exchange Shares for cash as provided herein.
Upon such surrender, each such holder shall receive cash in an amount
equal to the Exchange Price for each Exchange Share represented by a
certificate so surrendered. Until so surrendered, each outstanding
certificate that prior to the Effective Time represented one or more
Exchange Shares shall be deemed for all purposes to evidence only the
ownership of the non-transferable right
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to receive the cash to be exchanged for each Exchange Share represented
by such certificate. With respect to any certificate for Exchange
Shares that has been lost or destroyed, the Acquiror shall pay the
holder thereof the consideration attributable to such certificate upon
receipt of (i) evidence of ownership of such Exchange Shares reasonably
satisfactory to the Acquiror, and (ii) an indemnity bond posted by such
holder in such amount as the Acquiror may reasonably require.
(c) If any cash deposited with the paying agent for
purposes of payment in exchange for the Exchange Shares remains
unclaimed following the expiration of six months after the Effective
Time, such cash shall be delivered to the Acquiror by the paying agent,
and thereafter the paying agent shall not be liable to any persons
claiming any amount of such cash, and any future surrender and exchange
shall be effected directly with the Acquiror (subject to applicable
abandoned property, escheat and similar laws). No interest shall accrue
or be payable with respect to any amount which any such holder shall be
so entitled to receive.
(d) None of the Acquiror, the Company or the paying agent
shall be liable to any person in respect of any unsurrendered Exchange
Shares (or dividends or distributions in respect thereto) or cash
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
1.3 Effects of the Exchange. The Exchange shall transpire pursuant
to the provisions of and with the effect provided in the Act. The Exchange is a
statutory share exchange and not a merger.
1.4 Closing. The closing of the Exchange (the "Closing") shall
take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, 3300 One
First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, at 10:00 a.m., local time, on the second business day after the day
on which the last of the conditions set forth in Section 2.5 of this Agreement
shall have been fulfilled or waived or at such other time and place as the
Participating Corporations shall agree.
1.5 Stock Options and Employee Benefit Plans. The Company shall
(a) terminate the 1997 Special Stock Option Plan, the 1997 Incentive Stock
Option Plan and the 1987 Special Stock Option Plan (the "Stock Option Plans"),
and shall terminate or amend any other plan or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company, prior to the Effective Time, so that no such interest shall remain
outstanding after the Effective Time, (b) grant no further options under the
Stock Option Plans and (c) take all necessary actions prior to the Effective
Time, including obtaining required consents, such that all outstanding options
under the Stock Option Plans shall be cancelled prior to the Effective Time,
provided that the exercise prices of all such options are above the Exchange
Price.
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ARTICLE 2
GENERAL CONDITIONS AND AGREEMENTS
2.1 Effective Time. As used in the Plan, the term "Effective Time"
means the time at which Articles of Share Exchange, substantially in the form
attached to this Agreement as Annex A, shall have been filed with the Secretary
of State of North Carolina in accordance with Section 55-11-05 of the Act or
such later date set forth in the Articles of Share Exchange.
2.2 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing (whether before or after the approval of this Agreement by the
shareholders of the Company) as follows:
(a) By mutual written agreement of the Participating
Corporations; or
(b) (i) By either the Company or the Acquiror if the
Exchange shall not have been consummated by September 30,
2001; provided, that neither of the parties shall be entitled
to terminate this Agreement pursuant to this Section 2.2(b)(i)
if, at the time of such proposed termination, it is in
material breach of its representations and warranties,
covenants or other agreements under this Agreement; or
(ii) By the Company if, prior to the Effective
Time, there has occurred, and the Company has notified the
Acquiror of the occurrence of, a material breach by the
Acquiror of any representation, warranty, covenant or
agreement set forth herein and such breach is not cured within
30 days after notice; provided, that if such breach is not
reasonably capable of being cured within such 30 day period,
the Company may terminate this Agreement at any time after it
has given the Acquiror notice of such breach; and provided
further, that the Company shall not be entitled to terminate
this Agreement pursuant to this Section 2.2(b)(ii) if it is in
material breach of its representations and warranties,
covenants or other agreements under this Agreement; or
(c) (i) By either the Acquiror or the Company if a
federal, state or local court, commission, governmental body,
regulatory or administrative agency, authority or tribunal (a
"Governmental Entity") shall have issued an order, decree or
filing or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement; or
(ii) By the Acquiror if, prior to the Effective
Time, there has occurred, and the Acquiror has notified the
Company of the occurrence of, a material breach by the Company
of any representation, warranty, covenant or agreement set
forth herein and such breach is not cured within 30 days after
notice; provided, that if such breach is not reasonably
capable of being cured within such 30 day period, the Acquiror
may terminate this Agreement at any time after it has given
the Company notice of such breach; and provided further, that
the Acquiror shall not be entitled to terminate this Agreement
pursuant to this Section 2.2(c)(ii) if it is in
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material breach of its representations and warranties,
covenant or other agreement under this Agreement.
(d) By the Company for the purpose of allowing the
Company to enter into one or more related agreements in accordance with
Section 2.4 with respect to a Superior Proposal (as defined below) if
the Board, based on the recommendations of the special committee of the
Board established to review and consider the proposal to effect the
Exchange contemplated by this Agreement (the "Special Committee"),
after receiving advice from counsel to the Special Committee, has
determined in good faith that a failure to terminate this Agreement and
enter into an agreement to effect the Superior Proposal would
constitute a breach of its fiduciary duties; provided, that:
(i) the Company has complied with all provisions
of Section 2.4(d);
(ii) the Acquiror does not make, within three
business days after receipt of the Company's written
notification of its intention to enter into a binding
agreement for a Superior Proposal, an offer to enter into an
amendment to this Agreement containing terms such that the
Board, based on the recommendation of the Special Committee
after receiving advice from its financial advisors, determines
in good faith that this Agreement as so amended is at least as
favorable, from a financial point of view, to the shareholders
of the Company (other than the Acquiror) as the Superior
Proposal;
(iii) the Company pays the Acquiror's Expenses (as
defined below) in accordance with Section 2.3(b) hereof; and
(iv) substantially contemporaneously with such
termination, the Company enters into a definitive agreement to
effect the Superior Proposal.
(e) By the Acquiror, at any time prior to the approval of
the Exchange by the shareholders of the Company, if:
(i) the Board, or the Special Committee, shall
have withdrawn, modified, or changed its recommendation in
respect of this Agreement in a manner adverse to the Acquiror
or resolved to do so;
(ii) the Board, or the Special Committee, shall
have recommended any proposal other than by the Acquiror in
respect of an Acquisition Transaction (as defined below) or
resolved to do so; or
(iii) the Company has received a proposal
regarding an Acquisition Transaction and the Company shall not
have rejected such proposal within 10 business days after its
receipt or, if sooner, the date its existence first becomes
publicly disclosed.
(f) By the Company if there shall have been threatened,
instituted or pending any action or proceeding by any Governmental
Entity, or by any other Person, domestic or foreign, before any court
of competent jurisdiction or Governmental Entity, which
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could reasonably be expected to make illegal, materially impede or
otherwise directly or indirectly prohibit or materially restrain the
Exchange or seek to obtain material damages in connection therewith.
2.3 Effect of Termination.
(a) In the event of a party's termination of this
Agreement as provided in Section 2.2 hereof, written notice thereof
shall promptly be given to the other party specifying the provision
hereof pursuant to which such termination is made, and, subject to
Section 2.3(b) hereof, this Agreement shall become null and void and
there shall be no liability on the part of the Acquiror or the Company;
provided, that nothing herein shall relieve any party from liability
for any breach of this Agreement.
(b) If:
(i) the Acquiror shall have terminated this
Agreement pursuant to Section 2.2(e);
(ii) the Acquiror shall have terminated this
Agreement pursuant to Section 2.2(c)(ii) and following the
date hereof and either prior to such termination or within two
months after such termination, (A) the Company shall have
received a proposal with respect to an Acquisition Transaction
that the Company has not rejected prior to such termination,
and (B) within 12 months after the date of such termination,
the Company shall enter into a definitive agreement with
respect to such Acquisition Transaction ; or
(iii) the Company shall have terminated this
Agreement pursuant to Section 2.2(d);
then the Company shall pay to the Acquiror an amount equal to the
Acquiror's actual and documented out-of-pocket expenses incurred or
paid by the Acquiror in connection with the Exchange, this Agreement
and the consummation of the transactions contemplated hereby
("Expenses"), which amounts shall be payable by wire transfer to such
account as the Acquiror may designate in writing to the Company. The
Company shall pay such Expenses within two business days after the
Acquiror has provided the Company with documentation of the Expenses
and a written request for payment, provided there has occurred (A) a
termination pursuant to Section 2.2(d) or Section 2.2(e) or (B) an
Acquisition Transaction under the circumstances described in Section
2.3(b)(ii).
2.4 Conduct of the Participating Corporations prior to the
Effective Time.
(a) Until the completion of the Exchange, the Company
shall continue to conduct its business without material change and it
shall not, without the consent of the Acquiror, (i) issue any equity
security or instrument convertible into any equity security, (ii) make
any distribution or other disposition of its assets, capital or surplus
except in the ordinary course of business, (iii) take any action which
would impair its assets, or (iv) take any action that would cause its
representations and warranties to be untrue in any material respect at
the Effective Time. Subject to the conditions set forth in this
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Agreement, prior to the Effective Time, each of the Participating
Corporations shall promptly take all such actions as shall be necessary
or appropriate in order to effect the Exchange in accordance with the
terms and conditions of the Plan, including, but not limited to,
complying with the conditions set forth in Section 2.5(b).
(b) During the period beginning on the date of this
Agreement and ending at the Effective Time, the Company shall, and
shall cause each of its subsidiaries to, upon reasonable notice, afford
the Acquiror and its counsel, accountants, financing sources,
consultants and other authorized representatives reasonable access
during normal business hours to the employees, properties, books and
records and accountants of the Company and its subsidiaries. The
Company shall furnish promptly to the Acquiror (i) a copy of each
report, schedule or other document filed by it or any of its
subsidiaries during such period pursuant to federal or state securities
laws and (ii) all other information concerning its or its subsidiaries'
business, properties and personnel as the Acquiror shall from time to
time reasonably request.
(c) Subject to Section 5.5(a), each party hereto shall,
and shall cause each of its directors, officers, attorneys and advisors
to, maintain the confidentiality of all information obtained hereunder
which is not otherwise publicly disclosed by the other party, such
undertakings with respect to confidentiality to survive any termination
of this Agreement. In the event of the termination of this Agreement,
each party shall return to the other party upon request all
confidential information previously furnished in connection with the
transactions contemplated by this Agreement.
(d) The Company shall, and shall cause its subsidiaries
and each of their directors, officers, employees, agents, advisors and
representatives to, immediately cease any discussions or negotiations
with third parties with respect to any Acquisition Transaction. Prior
to the Effective Time, the Company agrees that it shall not, and shall
not authorize or permit any of its subsidiaries or any of their
directors, officers, agents, advisors or representatives to, directly
or indirectly:
(i) Solicit, initiate, facilitate or encourage
(including without limitation by furnishing information to a
third party or by taking any action which would make the
Rights Agreement dated as of September 2, 1997 between the
Company and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agreement"), inapplicable to any
Acquisition Transaction (other than the Exchange)) any
inquiries or the making of any proposal with respect to any
tender offer or exchange offer involving the Company or any
proposal with respect to any merger, consolidation, statutory
share exchange or other business combination involving the
Company or any subsidiary of the Company, the acquisition of
all or any significant part of the assets of the Company or
any subsidiary of the Company or more than 10% of any class of
the capital stock of the Company or any subsidiary of the
Company (each, an "Acquisition Transaction");
(ii) Except for agreements with respect to a
Superior Proposal entered into in accordance with Section
2.2(d) and except for confidentiality agreements
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entered into in connection with actions permitted in
accordance with Section 2.4(d)(iii), enter into any agreement,
arrangement or understanding with respect to any Acquisition
Transaction or enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to
consummate the Exchange or any other transaction contemplated
by this Agreement; or
(iii) Negotiate, explore or otherwise engage in
discussions with any individual or any partnership, joint
venture, corporation, trust, limited liability company or any
other entity or any unincorporated organization or group (a
"Person"), other than the Acquiror and its representatives,
with respect to any Acquisition Transaction, or any inquiry
that may reasonably be expected to lead to a proposal for an
Acquisition Transaction; provided, that the Company may (A)
participate in discussions with or request clarifications from
or furnish information (pursuant to a confidentiality
agreement with terms not more favorable to such third party
than as set forth in Section 2.4(c)) to any third party which
makes an unsolicited written proposal to effect an Acquisition
Transaction that did not result from the breach of this
Section 2.4 and subject to compliance with its obligations
under Section 2.4(d), in each case solely for the purpose of
obtaining information reasonably necessary to ascertain
whether such Acquisition Transaction is, or could reasonably
likely lead to, a Superior Proposal, and (B) in response to an
unsolicited written proposal from a third party making a
Superior Proposal that did not result from the breach of this
Section 2.4 and subject to compliance with its obligations
under Section 2.4(d), furnish information (pursuant to a
confidentiality agreement with terms not more favorable to
such third party than as set forth in Section 2.4(c)) to and
engage in discussions and negotiations with such third party,
but only, in the case of clause (A) and clause (B), if the
Board, based on the recommendation of the Special Committee
after receiving written advice from its financial advisors and
after receiving advice from outside counsel to the Special
Committee, determines in good faith that taking such action is
in the best interests of the Company and its shareholders
other than the Acquiror and such action is required by its
fiduciary duties under applicable law.
(iv) Without limiting the foregoing, it is agreed
that any violation of the restrictions set forth in this
Section 2.4(d) by any director, officer, employee, agent,
advisor or representative of the Company, whether or not such
Person is purporting to act on behalf of the Company, shall
constitute a breach of this Section 2.4(d) by the Company.
(e) The Company agrees to advise the Acquiror in writing
within 24 hours after the receipt thereof of the existence of:
(i) Any inquiries, proposals or requests for
information received by the Company or any of its directors,
officers, agents, advisors or representatives (other than
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. or ▇▇▇▇▇ ▇. ▇▇▇▇▇), or by the
financial and legal advisors to the Special Committee, from a
Person (other than the Acquiror and its representatives) with
respect to an Acquisition Transaction; and
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(ii) The content of any such inquiries, proposals
or requests, including the identity of such third party and
the terms of any financing arrangement or commitment in
connection with such Acquisition Transaction;
and shall update the Acquiror on an ongoing basis or upon the
Acquiror's reasonable request on the status thereof. The Company shall
simultaneously provide to the Acquiror any non-public information
concerning the Company provided to any other Person or group in
connection with any Acquisition Transaction which was not previously
provided to the Acquiror.
(f) As used herein, "Superior Proposal" means a written
and unsolicited proposal or offer made by any Person (other than the
Acquiror) to acquire all or substantially all of the capital stock of
the Company pursuant to a tender offer, exchange offer, merger,
statutory share exchange or other business combination or to purchase
all or substantially all of the assets of the Company on terms that, as
determined in good faith by the Board, based on the recommendation of
the Special Committee after receiving written advice of its financial
advisors, are more favorable from a financial point of view to the
Company and its shareholders, other than the Acquiror, than the
transactions contemplated hereby and any alternative proposed by the
Acquiror.
2.5 Conditions to the Exchange.
(a) The obligations of the Participating Corporations and
the Principal Shareholders to consummate the Exchange pursuant to the
Plan shall be conditioned upon the satisfaction of the following
conditions:
(i) The Plan shall have been approved at the
meeting of shareholders of the Company held for such purpose
(the "Shareholder Meeting"), or any adjournment thereof, by
the vote of the holders of 75% of the Common Stock outstanding
and entitled to vote thereon.
(ii) All filings, registrations, notices,
consents, approvals, authorizations, certificates, orders and
permits with respect to the exchange of the Exchange Shares
pursuant to and in accordance with the provisions of the Plan
required from any Governmental Entity having or asserting
jurisdiction over the Participating Corporations shall have
been made or obtained and be in full force and effect on a
basis reasonably satisfactory to the Participating
Corporations.
(iii) No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree or injunction which
prohibits or has the effect of prohibiting the consummation of
the Exchange; provided, that the party asserting this
condition shall have used its reasonable best efforts to have
any such order, decree or injunction vacated.
(iv) There shall not have been threatened,
instituted or pending any action or proceeding by any
Governmental Entity, or by any other Person, domestic or
foreign, before any court of competent jurisdiction or
Governmental Entity, which could reasonably be expected to:
(i) make illegal, materially impede
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or otherwise directly or indirectly prohibit or materially
restrain the Exchange or seek to obtain material damages in
connection therewith, (ii) prohibit or materially limit the
ownership or operation by the Acquiror of all or any material
portion of the business or assets of the Company and its
subsidiaries taken as a whole or compel the Acquiror to
dispose of or hold separately all or any material portion of
the business or assets of the Acquiror or the Company and its
subsidiaries taken as a whole, or seek to impose any material
limitation on the ability of the Acquiror to conduct its
business or own such assets, or (iii) have a material adverse
effect on the business of the Acquiror or the Company and its
subsidiaries taken as a whole (hereinafter as applied to the
Company, a "Material Adverse Effect").
(v) Each of the Participating Corporations shall
have received from the other Participating Corporation such
certificate or certificates as shall reasonably be requested
to evidence satisfaction of the conditions set forth in this
Section 2.5.
(b) The obligations of the Acquiror and the Principal
Shareholders to consummate the Exchange shall be conditioned on the
satisfaction of the following conditions:
(i) The representations and warranties of the
Company made in this Agreement shall be true and correct in
all material respects at, and at all times prior to, the
Effective Time, and the Company shall have fully performed in
all material respects its covenants and obligations under this
Agreement at or prior to the Effective Time.
(ii) The holders of no more than 5% of the Common
Stock shall have given written notice of their intent to
demand payment for their Shares and shall not have voted for
the Exchange, pursuant to Article 13 of the Act.
(iii) There shall not have occurred any event,
change, circumstance or occurrence that has had or that would
reasonably be expected to have a Material Adverse Effect on
the Company or any of its subsidiaries taken as a whole.
(iv) There shall not have occurred and be
continuing (A) any general suspension of, or limitation on
prices for, trading in securities through the Nasdaq Stock
Market or (B) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United
States.
(v) There shall not have been threatened,
instituted or pending any action or proceeding by any
Governmental Entity, or by any other Person, domestic or
foreign, before any court of competent jurisdiction or
Governmental Entity, which could reasonably be expected to (i)
impose limitations on the ability of the Acquiror effectively
to exercise full rights of ownership of the Shares owned by
it, including, without limitation, the right to vote such
Shares on all matters properly presented to the Company's
shareholders or (ii) require divestiture by the Acquiror of
any Shares.
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14
(vi) The Acquiror shall have obtained financing
necessary to satisfy its obligations to pay the Exchange Price
and the Expenses on terms and conditions satisfactory to the
Acquiror in its sole discretion (it being understood that this
condition shall not apply to the Principal Shareholders).
(c) The obligations of the Company to consummate the
Exchange shall be conditioned on the representations and warranties of
the Acquiror made in this Agreement being true and correct in all
material respects at, and at all times prior to, the Effective Time,
and the Acquiror having fully performed in all material respects its
covenants and obligations under this Agreement at or prior to the
Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Due Authorization. The Company has the requisite corporate
power and authority to execute and deliver this Agreement and, following
compliance with Section 2.5(a)(i), to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement by the Company
(through the Chairman of the Special Committee) and the consummation by the
Company of the transactions contemplated by this Agreement have been duly and
validly authorized by the Board and no other corporate proceeding on the part of
the Company is necessary to authorize this Agreement or to consummate the
transactions so contemplated, other than the approval and adoption of this
Agreement by the holders of 75% of the Shares outstanding. This Agreement has
been duly and validly executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and subject to general principles of equity (whether considered in a proceeding
in equity or at law).
3.2 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement by the Company nor the consummation of the
transactions contemplated by this Agreement will (a) conflict with or result in
a breach of any provision of the articles of incorporation or bylaws of the
Company; (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except pursuant to the
Exchange Act; (c) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms of any obligation to which
the Company is a party or by which any of its assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or that would not
materially and adversely affect the ability of the Company to consummate the
transactions contemplated by this Agreement; or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
of its assets, except for violations that would not materially and adversely
affect the ability of the Company to consummate the transactions contemplated by
this Agreement.
3.3 SEC Reports. The Company has filed with the Securities and
Exchange Commission (the "SEC") all forms, reports and documents required to be
filed by it pursuant to applicable law since January 1, 1998 (the "SEC
Reports"), all of which have complied as of their
-11-
15
respective filing dates in all material respects with all applicable
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the
rules and regulations of the SEC promulgated under the Exchange Act. None of the
SEC Reports, including, without limitation, any financial statements or
schedules included or incorporated by reference in the SEC Reports, at the time
filed, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3.4 Litigation. There is no claim, action, proceeding or
governmental investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries before any court or
other Governmental Entity that, individually or in the aggregate, could be
reasonably expected to (i) have a Material Adverse Effect or (ii) result in a
material amendment or termination of the Plan or prevent, enjoin, materially
alter the terms of or materially delay the Exchange.
3.5 Rights Agreement; Anti-Takeover Laws. The Rights Agreement is
not applicable to this Agreement or to the transactions contemplated by this
Agreement. Neither the North Carolina Shareholder Protection Act nor the North
Carolina Control Share Acquisition Act is applicable to the Company. The only
vote of shareholders of the Company required to approve and adopt this Agreement
is the affirmative vote of the holders of at least 75% of the outstanding
Shares.
3.6 Fairness Opinion. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the independent
financial advisor to the Special Committee, has delivered to the Special
Committee and the Board its written opinion that the Exchange Price is fair,
from a financial point of view, to the Company and its subsidiaries and the
holders of the Shares other than the Acquiror. At the date of this Agreement,
such opinion has not been withdrawn or modified. A true and complete copy of
such opinion has been delivered to the Acquiror.
3.7 Board Action. The Special Committee, at a meeting duly called
and held, has unanimously (i) determined that the Exchange is fair to and in the
best interests of the Company and its subsidiaries and the holders of the Shares
other than the Acquiror and (ii) submitted to the Board its recommendation that
the Board approve and adopt this Agreement and the Plan and that the Board
recommend that the shareholders of the Company approve and adopt this Agreement
and the Plan. The Board, at a meeting duly called and held, has unanimously
(exclusive of directors who abstained from voting because of their relationship
with the Acquiror) (i) determined that the Exchange is fair to and in the best
interests of the holders of the Shares other than the Acquiror, (ii) approved
and adopted this Agreement and the Plan and (iii) recommended that the
shareholders of the Company approve and adopt this Agreement and the Plan. The
Company has been advised by its directors and executive officers that each of
them intends to vote all of his or her Shares in favor of approval and adoption
of this Agreement and the Plan.
3.8 Absence of Certain Changes. Since March 4, 2000, except as
contemplated by this Agreement or disclosed in any SEC Report filed since the
Company's Annual Report on Form 10-K for the year ended March 4, 2000 and prior
to the date of this Agreement, there has not been (i) any change in the
business, operations, properties, condition (financial or otherwise),
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assets or liabilities (including, without limitation, contingent liabilities) of
the Company and its subsidiaries having individually or in the aggregate a
Material Adverse Effect, (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to any property or asset of the Company or
any of its subsidiaries having, individually or in the aggregate, a Material
Adverse Effect, (iii) any change by the Company in its accounting methods,
principles or practices not mandated by the Financial Accounting Standards
Board, the American Institute of Certified Public Accountants or the SEC, or
(iv) any declaration, setting aside or payment of any dividend or distribution
in respect of any capital stock of the Company or any redemption, purchase or
other acquisition of any of its securities.
3.9 Proxy Statement and Transaction Statement Information. The
proxy statement to be sent to the shareholders of the Company in connection with
the Shareholder Meeting (as amended or supplemented, the "Proxy Statement") will
comply in all material respects with the requirements of the Exchange Act and,
on the date filed with the SEC, on the date first published, sent or given to
the Company's shareholders, and on the date of the Shareholder Meeting, will not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
the information supplied by the Acquiror in writing expressly for inclusion in
the Proxy Statement. The written information supplied or to be supplied by the
Company, expressly for inclusion or incorporation by reference in the
Transaction Statement will not, on the date filed with the SEC, the date first
published, sent or given to the Company's shareholders, and at the time of the
Shareholder Meeting, contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
3.10 Stock Options. The exercise price of each outstanding option
under the Stock Option Plans is above the Exchange Price.
3.11 Brokers. No broker, finder or other investment banker is
entitled to receive any brokerage, finder's or other fee or commission in
connection with this Agreement or the transactions contemplated by this
Agreement based upon agreements made by or on behalf of the Company, except that
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP was retained by, and acted as financial advisor to, the
Special Committee. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP's fee for its financial advisory services
is set forth in letter agreements between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and the Special
Committee, dated February 27 and April 11, 2001, copies of which have been
supplied to the Acquiror.
-13-
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR
4.1 Organization, Standing and Qualification. The Acquiror is duly
organized, validly existing and in good standing under the laws of the State of
North Carolina and has the corporate power to own all of its properties and
assets and to carry on its business as it is now being conducted.
4.2 Authority for this Agreement. The Acquiror has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Acquiror and the consummation by the Acquiror of the
transactions contemplated by this Agreement have been duly and validly
authorized by the board of directors of the Acquiror and no other corporate
proceeding on the part of the Acquiror is necessary to authorize this Agreement
or to consummate the transactions contemplated by this Agreement. This Agreement
has been duly and validly executed and delivered by the Acquiror and constitutes
a valid and binding agreement of the Acquiror, enforceable against the Acquiror
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency and similar laws affecting creditors rights
generally and subject to general principles of equity (whether considered in a
proceeding in equity or at law).
4.3 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement by the Acquiror nor the consummation of the
transactions contemplated by this Agreement will (a) conflict with or result in
a breach of any provision of the articles of incorporation or bylaws of the
Acquiror; (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except pursuant to the
Exchange Act; (c) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms of any obligation to which
the Acquiror is a party or by which any of its assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or that would not
materially and adversely affect the ability of the Acquiror to consummate the
transactions contemplated by this Agreement; or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Acquiror or
any of its assets, except for violations that would not materially and adversely
affect the ability of the Acquiror to consummate the transactions contemplated
by this Agreement.
4.4 Financing. The Principal Shareholders have the ability to fund
the Acquiror's obligations under this Agreement to pay the Exchange Price and
the Expenses by contributing to the Acquiror their own assets and arranging for
the Acquiror to obtain financing, which financing may be personally guaranteed
by the Principal Shareholders, and they hereby covenant to make available to the
Acquiror their assets and access to financing for such purposes. The Principal
Shareholders are parties to this Agreement solely for the purpose of jointly and
severally making the representation, warranty and covenant contained in the
foregoing sentence.
4.5 Litigation. There is no claim, action, proceeding or
governmental investigation pending, or to the knowledge of the Acquiror,
threatened against the Acquiror that, individually or in the aggregate, has
materially and adversely affected or could reasonably be expected to
-14-
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materially and adversely affect the ability of the Acquiror to consummate the
transactions contemplated by this Agreement or that in any manner seeks to
enjoin the Exchange.
4.6 Brokers. No broker, finder or other investment banker is
entitled to any brokerage, finder's or other similar fee or commission in
connection with this Agreement or the transactions contemplated by this
Agreement based upon agreements made by or on behalf of the Acquiror or its
shareholders, except that HHCO Limited was retained by, and acted as financial
advisor to, the Acquiror. HHCO Limited 's fee for its financial advising
services is set forth in a letter agreement between HHCO Limited and the
Acquiror, dated February 12, 2001, a copy of which has been supplied to the
Company.
4.7 Proxy Statement and Transaction Statement Information. The
written information supplied or to be supplied by the Acquiror expressly for
inclusion or incorporation by reference in the Proxy Statement and the
Transaction Statement will not, on the date filed with the SEC, the date first
published, sent or given to the Company's shareholders, and at the time of the
Shareholder Meeting, contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Indemnification; Directors and Officers Liability Insurance.
(a) Until the sixth anniversary of the Effective Time,
the Company shall indemnify each of its officers, directors or
employees (the "Indemnified Parties") against all losses, claims,
damages, liabilities, costs or expenses arising from his service as an
officer, director or employee or prior to and including the Effective
Time, and shall provide for the advancement of expenses incurred in
defense of any action or suit, to the fullest extent required pursuant
to the Company's articles of incorporation and bylaws as each is in
effect on the date of this Agreement. If any claim is made against any
of the Indemnified Parties on or prior to the sixth anniversary of the
Effective Time arising from his service as an officer, director or
employee at or prior to the Effective Time, the provisions of this
Section 5.1 shall continue in effect until the final disposition of all
such claims.
(b) Unless otherwise agreed to by the Acquiror, until the
sixth anniversary of the Effective Time, the Company shall maintain or
cause to be maintained in effect, at no expense to the beneficiaries
thereof, directors' and officers' liability protection with respect to
matters occurring at or prior to the Effective Time, providing the same
coverage with respect to the Company's current officers and directors
as in effect on the date of this Agreement.
(c) In the event the Company (i) consolidates with or
merges into or effects any other business combination with any other
Person and shall not be the continuing, surviving or controlling entity
of such consolidation, merger or combination or (ii)
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transfers all or substantially all of its properties and assets to any
Person, then and in each such case proper provisions shall be made so
that the successors and assigns of the Company shall assume the
obligations of the Company in this Section 5.1.
(d) Each of the Indemnified Parties is an intended
beneficiary of the provisions of this Section 5.1 and shall have the
right to enforce such provisions individually on his or her own behalf.
5.2 Shareholder Approval; Proxy Statement.
(a) The Company shall call the Shareholder Meeting for
the purpose of voting on the Exchange and shall take all action
necessary or advisable in its reasonable judgment to obtain shareholder
approval of the Exchange. The Shareholder Meeting shall be held as soon
as practicable following clearance of the Proxy Statement by the SEC as
provided in Section 5.2(b), and the Company will, through its Board,
subject to this Agreement, recommend to its shareholders the approval
of the Exchange. Subject to Sections 2.2(d) and 2.4(d), the Company
agrees that it shall include in the Proxy Statement the recommendation
of its Board to the shareholders of the Company to approve and adopt
this Agreement and approve the Exchange.
(b) The Company will, as soon as practicable following
the date of this Agreement, prepare and file with the SEC a preliminary
Proxy Statement and will use its reasonable best efforts to respond to
any comments of the SEC and to cause the Proxy Statement to be cleared
by the SEC. The Company and the Acquiror will, as soon as practicable
following the date of this Agreement, jointly prepare and file a
Transaction Statement on Schedule 13E-3 (the "Transaction Statement")
and will use their reasonable best efforts to respond to any comments
of the SEC and to cause the Transaction Statement to be cleared by the
SEC. The Company shall give the Acquiror and its counsel the
opportunity to review the preliminary Proxy Statement prior to its
being filed with the SEC and all amendment and supplements to the Proxy
Statement, responses to requests for additional information and replies
to comments prior to their being filed with, or sent to, the SEC. As
promptly as practicable after the Proxy Statement and the Transaction
Statement have been cleared by the SEC, the Company shall mail the
Proxy Statement to the shareholders of the Company. If at any time
prior to the approval of this Agreement by the Company's shareholders
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement or Transaction Statement, the Company
will prepare and mail to its shareholders such an amendment or
supplement. The Company shall not use any material in connection with
the Shareholder Meeting without the Acquiror's prior approval.
(c) The Company shall use its commercially reasonable
efforts to obtain the necessary approvals by its shareholders of the
Exchange, this Agreement and the transactions contemplated hereby.
(d) The Acquiror agrees to cause all Shares owned by the
Acquiror to be voted in favor of the approval of the Exchange.
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5.3 Fees and Expenses. Whether or not the Exchange is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, except as expressly set forth in this Agreement.
5.4 Reasonable Efforts. On the terms and subject to the conditions
set forth in this Agreement, each of the parties agrees to use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Exchange, and the other
transactions contemplated by this Agreement, including (a) obtaining all
necessary actions or non-actions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from or to avoid an action or proceeding by any Governmental Entity,
(b) obtaining all necessary consents, approvals or waivers from third parties,
(c) defending any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (d) executing and delivering any additional instruments
necessary to consummate the transactions contemplated by this Agreement.
Notwithstanding the foregoing, no loan agreement or contract for borrowed money
shall be repaid except as currently required by its terms, in whole or in part,
and no contract shall be amended to increase the amount payable thereunder or
otherwise to be more burdensome to the Company or any of its subsidiaries in
order to attain any such consent, approval or authorization without the prior
written consent of the Acquiror.
5.5 Public Announcements; Certain Notices.
(a) The Acquiror and the Company will consult with each
other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this
Agreement, and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required
by applicable law or regulation or by obligations pursuant to any
listing agreement with any national securities exchange or The Nasdaq
Stock Market so long as it has used reasonable best efforts to consult
with the other party prior to issuing such press release or making such
public disclosure.
(b) The Company shall give prompt notice to the Acquiror,
and the Acquiror shall give prompt notice to the Company, of the
occurrence, or failure to occur, of any event, which occurrence or
failure to occur would likely cause any representation or warranty made
by it contained in the Agreement to be untrue in any material respect
at any time from the date of this Agreement to the Closing. Each of the
Company and the Acquiror shall give prompt notice to the other party of
any notice or other communication from any third party alleging that
the consent of such third party is or may be required in connection
with the transactions contemplated by this Agreement.
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5.6 Exemption from Liability Under Section 16(b). The Board, or a
committee of non-employee directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall prior to the Effective
Time adopt a resolution providing that, to the extent the Exchange is deemed for
purposes of Section 16 of the Exchange Act to constitute a purchase of Shares by
the Acquiror and by its controlling shareholders who also are officers and
directors of the Company, such purchases (including the specific changes in such
officers' and directors' beneficial ownership of the Company's Common Stock
resulting from the Exchange) are approved by such Board or by such committee
thereof and are intended to be exempt from liability pursuant to Section 16(b)
of the Exchange Act.
ARTICLE 6
NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered personally or via courier service or when
received if mailed by registered mail, return receipt requested to the parties
at the addresses indicated below:
To the Acquiror: PF Management, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
3300 One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, III
To the Company: Special Committee of the Board of Directors
Pierre Foods, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
Copy to: ▇▇▇▇▇ & Lardner
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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ARTICLE 7
MISCELLANEOUS
7.1 Governing Law. This Agreement shall be interpreted, construed
and enforced under and in accordance with the laws of the State of North
Carolina.
7.2 Binding Agreement. This Agreement shall be binding on and
shall inure to the benefit of the parties to this Agreement. Obligations
undertaken by the parties may not be assigned or delegated without the written
consent of the other party hereto and, except as provided in Section 5.1(d),
nothing herein shall be construed to create any rights enforceable by any other
Person.
7.3 Counterpart Originals. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, as long as one or more counterparts shall have been signed by each of
the parties and delivered to the other.
7.4 Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties, superseding all prior agreements and
understandings between them relating to the subject matter of this Agreement.
7.5 Amendments. This Agreement may be amended only by the written
agreement of both parties hereto; provided, at the request of the Acquiror prior
to the approval of this Agreement by the shareholders of the Company, the
Company shall enter into an amendment to this Agreement that provides for the
acquisition of the Company by the Acquiror in a multi-step transaction that
involves a tender offer for all the outstanding Shares at a price equal to the
Exchange Price, followed by a statutory share exchange in which the Shares of
non-tendering shareholders would be converted into the right to receive the
Exchange Price. After the approval of this Agreement by the shareholders of the
Company, no amendment may be made which reduces the amount or changes the form
of consideration to be received in the Exchange or otherwise changes or effects
any change that would adversely affect the holders of the Shares without the
further approval of the shareholders of the Company.
7.6 Definitions.
Term Defined in Section
---- ------------------
Act Introduction
Aggregate Exchange Consideration Section 1.2(a)
Agreement Introduction
Acquiror Introduction
Acquisition Transaction Section 2.4(d)(i)
Board Statement of Purpose
Closing Section 1.4
Common Stock Statement of Purpose
Company Introduction
Exchange Statement of Purpose
Exchange Act Section 3.3
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Exchange Agreement Introduction
Exchange Price Section 1.1(b)
Exchange Shares Section 1.1(b)
Effective Time Section 2.1
Expenses Section 2.3(b)
Governmental Entity Section 2.2(c)(i)
Indemnified Parties Section 5.1(a)
Material Adverse Effect Section 2.5(a)(iv)
Participating Corporations Introduction
Person Section 2.4(d)(iii)
Plan Statement of Purpose
Principal Shareholders Introduction
Proxy Statement Section 3.9
Rights Statement of Purpose
Rights Agreement Section 2.4(d)(i)
SEC Section 3.3
SEC Reports Section 3.3
Shareholder Meeting Section 2.5(a)(i)
Shares Statement of Purpose
Special Committee Section 2.2(d)
Stock Option Plans Section 1.5
Stock Purchase Plan Section 1.5
Superior Proposal Section 2.4(f)
Transaction Statement Section 5.2(b)
[The remainder of this page is intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
dates indicated below.
PIERRE FOODS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Special Committee
of the Board of Directors
PF MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
(Solely for the purpose of Sections 4.4 and 2.5)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
(Solely for the purpose of Sections 4.4 and 2.5)
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ANNEX A
ARTICLES OF SHARE EXCHANGE
BETWEEN
PF MANAGEMENT, INC.
AND
PIERRE FOODS, INC.
Pursuant to Section 55-11-05 of the General Statutes of North Carolina,
PF Management, Inc., a corporation organized under the laws of the State of
North Carolina, hereby submits these Articles of Share Exchange for the purpose
of acquiring all of the outstanding shares of common stock, no par value, of
Pierre Foods, Inc., a corporation organized under the law of the State of North
Carolina.
I. The Plan of Share Exchange that was duly adopted by the board
of directors of each of the corporations participating in the exchange and that
was approved by the shareholders of Pierre Foods, Inc. in the manner prescribed
by Chapter 55 of the General Statutes of North Carolina is as follows:
PLAN OF SHARE EXCHANGE
A. CORPORATIONS PARTICIPATING IN SHARE EXCHANGE.
PF Management, Inc. (the "Acquiror") will acquire all
of the outstanding shares of Pierre Foods, Inc. (the "Company")
pursuant to the terms and conditions of this Plan.
B. EXCHANGE OF SHARES.
At the effective time of the share exchange (the
"Effective Time"), the shares of the corporations participating in the
share exchange shall be exchanged as follows:
1. Acquiror. The outstanding shares of the
Acquiror will not be exchanged or altered in any manner as a
result of the share exchange and will remain outstanding as
shares of the Acquiror.
2. The Company. Each outstanding share of the
Company, except those already owned by the Acquiror, will be
exchanged for and become the right to receive from the
Acquiror $1.21 in cash per share and each such share shall be
cancelled.
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3. Surrender of Share Certificates. Each holder
of a certificate representing shares of the Company to be
exchanged under this Plan will be entitled, upon presentation
and surrender to the Acquiror of such certificate, to receive
in exchange therefor the consideration described in paragraph
2 of this Plan. Until so surrendered, each outstanding
certificate that prior to the Effective Time represented
shares of the Company will be deemed for all purposes to
evidence ownership of the consideration to be issued for such
shares.
C. ABANDONMENT.
After the approval of this Plan by the shareholders of the
Company, and at any time prior to the exchange becoming effective, the
board of directors of the Acquiror may, in its discretion, abandon the
share exchange.
II. Approval by the shareholders of the undersigned Acquiror was
not required.
III. The share exchange will become effective upon filing by the
Secretary of State of North Carolina.
This the ______ day of ______________, 2001.
PF MANAGEMENT, INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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