AGREEMENT AND PLAN OF MERGER
among
XXXXXX DODGE CORPORATION
AAV CORPORATION
and
ASARCO INCORPORATED
Dated as of October 5, 1999
TABLE OF CONTENTS
Page
ARTICLE I
THE ASARCO OFFER
Section 1.1 The ASARCO Offer..........................................2
Section 1.2 ASARCO Elections..........................................3
Section 1.3 ASARCO Action.............................................5
Section 1.4 Directors.................................................6
ARTICLE II
THE ASARCO MERGER; CLOSING
Section 2.1 The ASARCO Merger.........................................7
Section 2.2 Closing...................................................7
Section 2.3 Effective Time............................................8
Section 2.4 Effects of the ASARCO Merger..............................8
Section 2.5 Directors and Officers....................................8
ARTICLE III
EFFECT OF THE ASARCO MERGER ON THE STOCK OF
ASARCO; EXCHANGE OF CERTIFICATES
Section 3.1 Effect on ASARCO Stock and SubA Stock.....................9
Section 3.2 Exchange of Certificates.................................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Organization, Qualification, Etc.........................15
Section 4.2 Capital Stock............................................17
Section 4.3 Corporate Authority Relative to this Agreement...........18
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Section 4.4 Non-Contravention; Consents and Approvals.................19
Section 4.5 Reports and Financial Statements..........................20
Section 4.6 Environmental Matters.....................................21
Section 4.7 Employee Benefit Plans; ERISA.............................23
Section 4.8 Information Statement; Registration Statement; Other
Information..............................................27
Section 4.9 ASARCO Rights Plan........................................27
Section 4.10 Tax Matters...............................................28
Section 4.11 Opinion of Financial Advisors.............................29
Section 4.12 Required Vote.............................................30
Section 4.13 Absence of Certain Changes................................30
Section 4.14 No Undisclosed Material Liabilities.......................32
Section 4.15 Labor Relations...........................................32
Section 4.16 No Prior Activities.......................................32
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business Pending the Effective Time............33
Section 5.2 Investigation.............................................35
Section 5.3 Shareholder Approvals and Other Cooperation...............36
Section 5.4 Affiliate Agreements......................................39
Section 5.5 ASARCO Employee Stock Options, Incentive and Benefit
Plans....................................................39
Section 5.6 Filings; Other Action.....................................41
Section 5.7 Further Assurances........................................43
Section 5.8 Takeover Statute..........................................43
Section 5.9 No Solicitation by ASARCO.................................43
Section 5.10 Public Announcements......................................45
Section 5.11 Indemnification and Insurance.............................45
Section 5.12 Accountants' "Comfort" Letters............................46
Section 5.13 Additional Reports........................................46
Section 5.14 Disclosure Schedule Supplements...........................47
Section 5.15 Certain Litigation........................................47
Section 5.16 Shareholder Litigation....................................47
Section 5.17 Section 16(b).............................................47
Section 5.18 Change of Control Agreements..............................48
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ARTICLE VI
CONDITIONS TO THE ASARCO MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the
ASARCO Merger............................................48
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.1 Termination or Abandonment................................49
Section 7.2 Termination by Parent.....................................50
Section 7.3 Termination by ASARCO.....................................50
Section 7.4 Effect of Termination.....................................50
Section 7.5 Termination Fee. .........................................51
Section 7.6 Amendment or Supplement...................................51
Section 7.7 Extension of Time, Waiver, Etc............................52
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and Warranties.............52
Section 8.2 Expenses..................................................52
Section 8.3 Counterparts; Effectiveness...............................53
Section 8.4 Governing Law.............................................53
Section 8.5 Notices...................................................53
Section 8.6 Assignment; Binding Effect................................54
Section 8.7 Severability..............................................54
Section 8.8 Enforcement of Agreement..................................54
Section 8.9 Entire Agreement; Third-Party Beneficiaries...............55
Section 8.10 Headings..................................................55
Section 8.11 Definitions...............................................55
Section 8.12 Finders or Brokers........................................55
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LIST OF EXHIBITS
Exhibit A - Form of ASARCO Affiliate Letter
iv
INDEX OF DEFINED TERMS
Defined Term Section
affiliates.............................................................8.11
Aggregate ASARCO Merger Cash Consideration........................3.1(b)(i)
Aggregate ASARCO Merger Stock Consideration.....................3.1(b)(iii)
Agreement......................................................Introduction
Antitrust Laws....................................................5.6(b)(i)
ASARCO.........................................................Introduction
ASARCO Acquisition Agreement.........................................5.9(b)
ASARCO Award.........................................................5.5(b)
ASARCO Board.........................................................1.3(a)
ASARCO Cash Consideration......................................Introduction
ASARCO Cash Election Shares..........................................1.2(a)
ASARCO Cash Proration Factor......................................1.2(b)(i)
ASARCO Certificates..................................................3.1(b)
ASARCO Common Stock..................................................1.1(a)
ASARCO Designees.....................................................1.4(a)
ASARCO Disclosure Schedule.......................................Article IV
ASARCO Employees.....................................................5.5(e)
ASARCO Indemnified Parties..........................................5.11(a)
ASARCO Incorporated..................................................2.4(b)
ASARCO Maximum Cash Consideration....................................1.2(b)
ASARCO Maximum Stock Consideration...................................1.2(c)
ASARCO Merger........................................................2.1(a)
ASARCO Merger Cash Amount........................................3.1(b)(ii)
ASARCO Merger Consideration..........................................3.1(b)
ASARCO Merger Exchange Ratio.........................................3.1(b)
ASARCO Merger Stock Amount.......................................3.1(b)(iv)
ASARCO Non Electing Proration Factor............................1.2(d)(iii)
ASARCO Non Electing Shares...........................................1.2(a)
ASARCO Notice........................................................5.9(a)
ASARCO Offer...................................................Introduction
ASARCO Option Plans..................................................5.5(a)
ASARCO Policy.......................................................5.11(b)
ASARCO SAR...........................................................5.5(a)
ASARCO Shareholder Approval.........................................4.12(b)
ASARCO Shareholders Meeting.....................................5.3(c)(iii)
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ASARCO Stock Consideration.........................................Introduction
ASARCO Stock Election Shares.............................................1.2(a)
ASARCO Stock Options.....................................................5.5(a)
ASARCO Stock Proration Factor.........................................1.2(c)(i)
ASARCO Surviving Corporation.............................................2.1(a)
ASARCO Takeover Proposal.................................................5.9(a)
ASARCO Termination Fee......................................................7.5
CERCLA...................................................................4.6(d)
Certificates.............................................................2.2(c)
Closing.....................................................................2.2
Closing Date................................................................2.2
Code...............................................................Introduction
Combination........................................................Introduction
Common Shares Trust.................................................3.2(e)(iii)
control....................................................................8.11
Current Representing Party Group........................................4.10(a)
DGCL.....................................................................2.1(a)
Effective Time..............................................................2.3
Employee Benefit Plan.................................................4.7(g)(i)
Encumbrance..............................................................4.1(c)
Environmental Claim...................................................4.6(d)(i)
Environmental Law....................................................4.6(d)(ii)
Environmental Permits....................................................4.6(a)
ERISA...............................................................4.7(g)(iii)
ERISA Affiliate......................................................4.7(g)(iv)
Excess Shares........................................................3.2(e)(ii)
Exchange Act.............................................................1.3(b)
Exchange Agent...........................................................3.2(a)
Exchange Fund............................................................3.2(a)
Expiration Date..........................................................1.1(a)
Foreign Plan.........................................................4.7(g)(ii)
GAAP...............................................................Introduction
Governmental Entity......................................................4.4(a)
Hazardous Materials.................................................4.6(d)(iii)
HSR Act...............................................................5.6(b)(i)
interested shareholder...................................................4.3(b)
IRS......................................................................4.7(b)
Information Statement.......................................................4.8
Law......................................................................4.4(a)
vi
Material Adverse Effect.............................................4.1(a)
Minimum Condition...................................................1.1(a)
Multiemployer Plan..................................................4.7(a)
NJBCA...............................................................2.1(a)
NYSE............................................................3.2(e)(ii)
Offer Documents.....................................................1.1(a)
Parent........................................................Introduction
Parent Certificates.................................................3.2(a)
Parent Common Stock.................................................1.1(a)
Parent Disclosure Schedule......................................Article IV
Parent Shareholder Approval........................................4.12(a)
Parent Shareholders Meeting.....................................5.3(c)(ii)
Past Representing Party Group......................................4.10(a)
person................................................................8.11
Xxxxxx Dodge Proxy Statement....................................5.3(c)(ii)
Plan...........................................................4.7(g)(iii)
Registration Statement...........................................5.3(a)(i)
Representing Party..............................................Article IV
Representing Party Affiliated Group................................4.10(a)
Representing Party Agreements.......................................4.4(a)
Representing Party's Disclosure Schedule........................Article IV
Required Statutory Approvals........................................4.4(b)
Required Third Party Consents.......................................4.4(b)
Schedule 14d-1.........................................................4.8
Schedule 14d-9......................................................1.3(b)
SEC.................................................................4.5(a)
SEC Reports............................................................4.5
Securities Act.........................................................4.5
Share Issuance......................................................4.3(a)
Significant Subsidiaries..............................................8.11
SubA..........................................................Introduction
Subsidiaries..........................................................8.11
Tax Certificates.................................................5.3(a)(v)
Tax Return............................................................4.10
Taxes.................................................................4.10
Termination Date.......................................................5.1
vii
THIS AGREEMENT AND PLAN OF MERGER, dated as of October 5,
1999 (the "Agreement"), among XXXXXX DODGE CORPORATION, a New York corporation
("Parent"), AAV CORPORATION, a Delaware corporation ("SubA") and ASARCO
INCORPORATED, a New Jersey corporation ("ASARCO");
WHEREAS, Parent and ASARCO desire to combine their respective
businesses upon the terms and subject to the conditions in this Agreement (the
"Combina tion");
WHEREAS, (i) Parent is a corporation organized and existing
under the laws of the State of New York; and (ii) ASARCO is a corporation
organized and existing under the laws of the State of New Jersey;
WHEREAS, Parent has formed SubA, a wholly owned subsidiary of
Parent, and all the outstanding capital stock of SubA is owned by Parent;
WHEREAS, the Board of Directors of each of Parent and ASARCO
deems it advisable and in the best interests of their shareholders to effect the
Combination by causing ASARCO to become a subsidiary of Parent pursuant to the
ASARCO Merger as provided for in this Agreement;
WHEREAS, in furtherance of the Combination, Parent has caused
SubA to commence an exchange offer, which Parent shall cause SubA to amend in
accordance with the terms of this Agreement (as so amended, the "ASARCO Offer")
to acquire all of the issued and outstanding shares of ASARCO Common Stock, for
either $29.50 per share, net to the seller in cash, without interest (the
"ASARCO Cash Consideration") or 0.50266 of a share of Parent Common Stock (the
"ASARCO Stock Consideration"), subject to the election and proration provisions
of this Agreement and to the terms and conditions of this Agreement and the
ASARCO Offer;
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Combination and also
to prescribe various conditions to the Combination;
WHEREAS, for U.S. federal income tax purposes, it is intended
that the ASARCO Merger will qualify as a transaction described in Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code");
1
WHEREAS, for financial accounting purposes, it is intended
that the transactions contemplated by this Agreement will be accounted for as a
purchase transaction in accordance with United States generally accepted
accounting principles ("GAAP"); and
WHEREAS, the Agreement and Plan of Merger, dated as of July
15, 1999, as amended as of September 27, 1999, among Asarco Cyprus Incorporated,
a Delaware corporation, ACO Acquisition Corp., a New Jersey corporation, CAM
Acquisition Corp., a Delaware corporation, ASARCO and Cyprus Amax Minerals
Company, a Delaware corporation, has been terminated.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and fully
intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
THE ASARCO OFFER
Section 1.1 The ASARCO Offer. (a) As promptly as practicable
(but in no event later than five business days after the public announcement of
the transactions contemplated by this Agreement), Parent shall amend the ASARCO
Offer to reflect the existence of this Agreement and amend the conditions to the
ASARCO Offer in accordance herewith. The expiration date of the ASARCO Offer
shall be either (i) the initial expiration date of the ASARCO Offer as set forth
in the Schedule 14D-1 or (ii) the tenth business day from and after the date the
ASARCO Offer is amended to provide for the purchase of all of the outstanding
shares of ASARCO Common Stock in accordance with the terms hereof (the
"Expiration Date"), as soon as it is legally permitted under applicable Law. The
ASARCO Offer shall be made pursuant to a supplement to Parent's Offer to
Purchase dated September 22, 1999 and related letter of transmittal (together
with any supplements or amendments thereto, collectively the "Offer Documents")
containing the terms and conditions set forth in this Agreement and in form
reasonably satisfactory to ASARCO. The obligation of Parent to accept for
payment and pay for the shares of common stock, no par value, of ASARCO (the
"ASARCO Common Stock") tendered pursuant to the ASARCO Offer shall be subject to
the condition (the "Minimum Condition") that at least the number of shares of
ASARCO Common Stock that when added to the ASARCO Common Stock already owned by
Parent shall constitute 80% of then outstanding ASARCO Common Stock on a fully
diluted basis shall have been validly tendered and not withdrawn prior to the
expiration of the ASARCO Offer and also shall be subject to the satisfaction of
the other
2
conditions set forth in Annex A hereto. Parent expressly reserves the right to
waive any such condition (other than the Minimum Condition, the Xxxxxx Dodge
Stockholder Approval Condition and the condition relating to the effectiveness
of the Registration Statement), to increase the consideration per share of
ASARCO Common Stock payable in the ASARCO Offer, and to make any other changes
in the terms and conditions of the ASARCO Offer, provided however, that no
change may be made which decreases the consideration per share of ASARCO Common
Stock payable in the ASARCO Offer or which reduces the maximum number of shares
of ASARCO Common Stock to be acquired in the ASARCO Offer or which imposes
conditions to the ASARCO Offer in addition to those set forth in Annex A hereto.
Notwithstanding the foregoing, Parent shall extend the ASARCO Offer at any time
up to March 31, 2000 for one or more periods of not more than 10 business days,
if at the Expiration Date of the ASARCO Offer, or any extension thereof, any of
the conditions on Annex A is not satisfied or waived; provided, however, if all
of the conditions to the ASARCO Offer are satisfied or waived but the number of
shares of ASARCO Common Stock tendered is 85% or more, but less than 90%, of the
then outstanding number of shares of ASARCO Common Stock then Parent may extend
the ASARCO Offer for an aggregate period of not more than three business days
beyond the Expiration Date. The ASARCO Cash Consideration shall, subject to
applicable withholding of taxes, be net to the seller in cash, upon the terms
and subject to the conditions of the ASARCO Offer. Subject to the terms and
conditions of the ASARCO Offer, Parent shall accept for payment and pay the
ASARCO Cash Consideration and issue shares of common stock, par value $6.25 per
share, of Parent (the "Parent Common Stock") in payment of the ASARCO Stock
Consideration, as promptly as practicable after expiration of the ASARCO Offer,
for all shares of ASARCO Common Stock validly tendered and not withdrawn.
Section 1.2 ASARCO Elections.
(a) Subject to Sections 1.2(b), (c) and (d) below, each
holder of ASARCO Common Stock shall be entitled, with respect to each share of
ASARCO Common Stock held by such holder, to elect to receive either the ASARCO
Cash Consideration or the ASARCO Stock Consideration. Shares of ASARCO Common
Stock that are validly tendered and not withdrawn and (i) covered by elections
to receive the ASARCO Cash Consideration are referred to herein as "ASARCO Cash
Election Shares", (ii) covered by elections to receive the ASARCO Stock
Consideration are referred to herein as "ASARCO Stock Election Shares", and
(iii) not covered by a valid election to receive either the ASARCO Cash
Consideration or the ASARCO Stock Consideration are referred to herein as
"ASARCO Non Electing Shares".
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(b) Excess of Cash Elections. If the aggregate ASARCO Cash
Consideration elected in respect of all ASARCO Cash Election Shares exceeds
$14.75 multiplied by the total number of shares of ASARCO Common Stock
outstanding immediately prior to closing of the ASARCO Offer (the "ASARCO
Maximum Cash Consideration"), the following will occur:
(i) Each ASARCO Cash Election Share will be exchanged in the ASARCO
Offer for (A) $29.50 multiplied by a fraction (the "ASARCO Cash
Proration Factor"), the numerator of which is the ASARCO Maximum Cash
Consideration and the denominator of which is the number of ASARCO
Cash Election Shares multiplied by $29.50, and (B) a number of shares
of Parent Common Stock equal to 0.50266 multiplied by l minus the
ASARCO Cash Proration Factor.
(ii) Each ASARCO Stock Election Share and each ASARCO Non Electing
Share will be exchanged for 0.50266 of a share of Parent Common Stock.
(c) Excess of Stock Elections. If the aggregate ASARCO Stock
Consideration elected in respect of all ASARCO Stock Election Shares exceeds
0.25133120 multiplied by the total number of shares of ASARCO Common Stock
outstanding immediately prior to closing of the ASARCO Offer (the "ASARCO
Maximum Stock Consideration"), the following will occur:
(i) Each ASARCO Stock Election Share will be exchanged in the ASARCO
Offer for (A) a number of shares of Parent Common Stock equal to
0.50266 multiplied by a fraction (the "ASARCO Stock Proration
Factor"), the numerator of which is the ASARCO Maximum Stock
Consideration and the denominator of which is the number of ASARCO
Stock Election Shares multiplied by 0.50266, and (B) cash in an amount
equal to $29.50 multiplied by 1 minus the ASARCO Stock Proration
Factor.
(ii) Each ASARCO Cash Election Share and each ASARCO Non Electing
Share will be exchanged for $29.50, without interest.
(d) No Excess of Cash or Stock Elections. In the event that
neither Section 1.2(b) or 1.2(c) above is applicable, the following will occur:
(i) Each ASARCO Cash Election Share will be exchanged for $29.50 in
cash without interest.
4
(ii) Each ASARCO Stock Election Share will be exchanged for 0.50266 of
a share of Parent Common Stock.
(iii) Each ASARCO Non Electing Share will be exchanged for (A) an
amount in cash without interest equal to $29.50 multiplied by a
fraction (the "ASARCO Non Electing Proration Factor"), the numerator
of which is the difference between the ASARCO Cash Number less the
number of ASARCO Cash Election Shares and the denominator of which is
the number of ASARCO Non Electing Shares; and (B) a number of shares
of Parent Common Stock equal to 0.50266 multiplied by 1 minus the
ASARCO Non Electing Proration Factor. For purposes of this Section
1.2(d), the ASARCO Cash Number is determined by dividing the ASARCO
Maximum Cash Consideration by $29.50.
Section 1.3 ASARCO Action.
(a) ASARCO hereby approves of and consents to the ASARCO
Offer and represents that (i) the Board of Directors of ASARCO (the "ASARCO
Board"), at a meeting duly called and held on October 5, 1999, has unanimously
(A) determined that this Agreement and the transactions contemplated hereby,
including each of the ASARCO Offer and the ASARCO Merger, are fair to and in the
best interests of the holders of ASARCO Common Stock, (B) approved and adopted
this Agreement and the transactions contem plated hereby and (C) recommended
that the shareholders of ASARCO accept the ASARCO Offer and approve and adopt
this Agreement and the transactions contemplated hereby, and (ii) Credit Suisse
First Boston Corporation has delivered to the Board an opinion that the
consideration to be received by the holders of ASARCO Common Stock pursuant to
each of the ASARCO Offer and the ASARCO Merger is fair to the holders of ASARCO
Common Stock from a financial point of view. ASARCO hereby consents to the
inclusion in the Offer Documents of the recommendation of the ASARCO Board
described in the immediately preceding sentence, subject to Section 5.9(b).
ASARCO has been advised by each of its directors and executive officers that
they intend either to tender all shares of ASARCO Common Stock beneficially
owned by them to Parent pursuant to the ASARCO Offer or to vote such shares of
ASARCO Common Stock in favor of the approval and adoption by the stockholders of
ASARCO of this Agreement and the transactions contemplated hereby.
(b) As soon as reasonably practicable after the date hereof,
ASARCO shall file with the SEC an amendment to its Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D- 9") containing, subject to Section 5.9, the
recommendation of the ASARCO Board described in Section 1.3(a) and shall
disseminate the Schedule 14D-9 to the extent
5
required by Rule 14D-9 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and any other applicable federal securities laws.
ASARCO and Parent agree to correct promptly any information provided by either
of them for use in the Schedule 14D-9 which shall have become false or
misleading, and ASARCO further agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to
holders of ASARCO Common Stock, in each case as and to the extent required by
applicable federal securities laws.
Section 1.4 Directors. (a) Promptly upon the purchase of and
payment for shares of ASARCO by Parent or any of its Subsidiaries which
represent at least a majority of the outstanding shares of ASARCO Common Stock
(on a fully diluted basis) pursuant to the ASARCO Offer, Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the ASARCO Board 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 of ASARCO Common Stock beneficially owned by SubA, Parent and
any other wholly-owned subsidiary of Parent bears to the total number of shares
of ASARCO Common Stock then outstanding. ASARCO shall, upon request of SubA, use
all reasonable efforts promptly either to increase the size of its Board of
Directors or, at ASARCO's election, secure the resignations of such number of
its incumbent directors as is necessary to enable Parent's designees to be so
elected to the ASARCO Board, and shall cause Parent's designees to be so
elected. Notwithstanding the foregoing, until the Effective Time, ASARCO shall
retain as members of its Board of Directors at least two directors who are
directors of ASARCO on the date hereof (the "ASARCO Designees"); provided, that
subsequent to the purchase of and payment for shares of ASARCO Common Stock
pursuant to the ASARCO Offer, Parent shall always have its designees represent
at least a majority of the entire Board of Directors. ASARCO's obligations under
this Section 1.4(a) shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder. ASARCO shall promptly take all actions
required pursuant to such Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.4(a), including mailing to shareholders the
information required by such Section 14(f) and Rule 14f-1 as is necessary to
enable Parent's designees to be elected to the ASARCO Board of Directors. Parent
or SubA will supply ASARCO any information with respect to either of them and
their nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1.
(b) From and after the time, if any, that Parent's designees
constitute a majority of the ASARCO Board, any amendment of this Agreement, any
termination of this Agreement by ASARCO, any extension of time for performance
of any of the obligations of Parent or SubA hereunder, any waiver of any
condition or any of
6
ASARCO's rights hereunder or other action by ASARCO hereunder may be effected
only by the action of a majority of the directors of ASARCO then in office who
were directors of ASARCO 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 ASARCO Board.
ARTICLE II
THE ASARCO MERGER; CLOSING
Section 2.1 The ASARCO Merger.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the New Jersey Business Corporation Act
(the "NJBCA") and the Delaware General Corporation Law ("DGCL"), SubA shall
merge with ASARCO (the "ASARCO Merger") at the Effective Time. SubA shall be the
surviving corporation in the ASARCO Merger (the "ASARCO Surviving Corporation").
From and after the Effective Time, the identity and separate existence of ASARCO
shall cease.
(b) In connection with the ASARCO Merger, Parent shall
reserve a sufficient number of shares of Parent Common Stock prior to the ASARCO
Merger, to permit the issuance of shares of Parent Common Stock (i) to the
holders of ASARCO Common Stock, as of the Effective Time in accordance with the
terms of this Agreement, and (ii) upon the exercise of ASARCO Stock Options
being assumed by Parent in accordance with Section 5.5 hereof.
Section 2.2 Closing. The closing of the ASARCO Merger (the
"Closing") will take place at 10:00 a.m. local time on the day following the
later of the Parent Shareholders Meeting and the ASARCO Shareholders Meeting
(the "Closing Date"), but shall in no event be later than the second business
day after satisfaction or waiver of the conditions set forth in Article VI
unless another time or date is agreed to by the parties hereto. The Closing will
be held at the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
XX, unless another place is agreed to by the parties hereto.
Section 2.3 Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, (i) SubA and
ASARCO shall file with the Secretary of State of the State of New Jersey a
certificate of merger duly
7
completed and executed in accordance with the relevant provisions of the NJBCA
and shall make all other filings or recordings required under the NJBCA in order
to effect the ASARCO Merger and (ii) SubA shall file with the Secretary of State
of the State of Delaware a certificate of merger duly completed and executed in
accordance with the relevant provisions of the DGCL in order to effect the
ASARCO Merger. The ASARCO Merger shall become effective at the actual time of
the filing of both such certificates of merger, or of the later to be filed of
such certificates of merger, or at such other later time as is reasonably
specified in the certificates of merger (the time at which ASARCO Merger has
become fully effective being hereinafter referred to as the "Effective Time").
Section 2.4 Effects of the ASARCO Merger.
(a) NJBCA and DGCL . The ASARCO Merger shall have the effects
set forth in Section 14A:10-6 of the NJBCA and Section 259 of the DGCL.
(b) Name of Surviving Corporation. The name of the ASARCO
Surviving Corporation from and after the Effective Time shall be "ASARCO
Incorporated" until changed or amended in accordance with applicable Law.
(c) Charter Documents. At the Effective Time the Certificate
of Incorporation and the Bylaws of SubA, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and Bylaws,
respectively, of the ASARCO Surviving Corporation.
Section 2.5 Directors and Officers. The directors of SubA at
the Effective Time shall be the directors of the ASARCO Surviving Corporation
until the next annual meeting of shareholders of ASARCO (or their earlier
resignation or removal) and until their respective successors are duly elected
and qualified, as the case may be. The officers of SubA at the Effective Time
shall be the officers of the ASARCO Surviving Corporation, until their
respective successors are duly appointed.
ARTICLE III
EFFECT OF THE ASARCO MERGER ON THE STOCK OF
ASARCO; EXCHANGE OF CERTIFICATES
Section 3.1 Effect on ASARCO Stock and SubA Stock. As of the
Effective Time, by virtue of the ASARCO Merger and without any action on the
part of SubA, ASARCO or the holders of any securities of SubA or ASARCO:
8
(a) Cancellation of Treasury Stock and Parent Owned Stock.
Each share of ASARCO Common Stock that is owned directly by ASARCO or any of its
Subsidiaries or by Parent or any of its Subsidiaries (but not including any such
shares owned by employees or employee benefit or pension plans) shall
automatically be cancelled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of ASARCO Common Stock. Each issued and
outstanding share of ASARCO Common Stock (other than shares to be cancelled in
accordance with Section 3.1(a)) shall be converted into the ASARCO Stock
Consideration, the ASARCO Cash Consideration or a combination thereof, in each
case determined pursuant to this Section 3.1(b) (such consideration being
referred to herein as the "ASARCO Merger Consideration"). If Section 1.2(b) is
applicable to the ASARCO Offer, each outstanding share of ASARCO Common Stock
will be converted in the ASARCO Merger into the right to receive the ASARCO
Stock Consideration. If Section 1.2(c) is applicable to the ASARCO Offer, each
outstanding share of ASARCO Common Stock will be converted in the ASARCO Merger
into the right to receive the ASARCO Cash Consider ation. If neither Section
1.2(b) nor Section 1.2(c) is applicable, each outstanding share of ASARCO Common
Stock will be converted in the ASARCO Merger into (A) an amount of cash equal to
the ASARCO Merger Cash Amount, without interest, and (B) a number of shares of
Parent Common Stock equal to the ASARCO Merger Stock Amount. The ASARCO Merger
Cash Amount and the ASARCO Merger Stock Amount will be determined as follows:
(i) The aggregate amount of ASARCO Cash Consideration actually paid in
the ASARCO Offer will be subtracted from the Total ASARCO Available
Cash to determine the amount of cash available to be paid in the
ASARCO Merger (the "Aggregate ASARCO Merger Cash Consideration"). For
purposes of this Section, Total ASARCO Available Cash equals (A) the
number of shares exchanged in the ASARCO Offer plus the number of
shares of ASARCO Common Stock to be converted in the ASARCO Merger,
multiplied by (B) $14.75.
(ii) The Aggregate ASARCO Merger Cash Consideration will be divided by
the number of shares of ASARCO Common Stock to be converted in the
ASARCO Merger, to determine the amount of cash consideration to be
paid in respect of each such share of ASARCO Common Stock in the
ASARCO Merger (the "ASARCO Merger Cash Amount").
9
(iii) The aggregate number of shares of Parent Common Stock actually
issued as ASARCO Stock Consideration in the ASARCO Offer will be
subtracted from the Total ASARCO Available Stock to determine the
number of shares of Parent Common Stock available to be paid in the
ASARCO Merger (the "Aggregate ASARCO Merger Stock Consideration"). For
purposes of this Section, Total ASARCO Available Stock equals (A) the
number of shares of ASARCO Common Stock exchanged in the ASARCO Offer
plus the number of shares of ASARCO Common Stock to be converted in
the ASARCO Merger, multiplied by (B) 0.25133120.
(iv) The Aggregate ASARCO Merger Stock Consideration will be divided
by the number of shares of ASARCO Common Stock to be converted in the
ASARCO Merger, to determine the number of shares of Parent Common
Stock to be issued in respect of each such share of ASARCO Common
Stock in the ASARCO Merger (the "ASARCO Merger Stock Amount").
As of the Effective Time, all such shares of ASARCO Common Stock shall
no longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of ASARCO
Common Stock (the "ASARCO Certificates") shall cease to have any rights with
respect thereto, except the right to receive (x) the ASARCO Merger
Consideration, (y) certain dividends and other distributions in accordance with
Section 3.2(c), and (z) cash in lieu of fractional shares of Parent Common Stock
in accordance with Section 3.2(e), without interest.
(c) Conversion of Common Stock of SubA. Each issued and
outstanding share of common stock, par value $.01 per share, of SubA shall be
converted into one fully paid and nonassessable share of common stock of the
ASARCO Surviving Corporation.
Section 3.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Parent shall
enter into an agreement with a bank or trust company designated by it and
reasonably satisfactory to ASARCO (the "Exchange Agent"), which shall provide
that Parent shall deposit with the Exchange Agent as of the Effective Time, for
the benefit of the holders of shares of ASARCO Common Stock for exchange in
accordance with this Article III, through the Exchange Agent, (i) cash in the
amount required to be exchanged for ASARCO Common Stock pursuant to Section
3.1(b) and (ii) certificates ("Parent Certificates") representing the number of
whole shares of Parent Common Stock issuable pursuant to
10
Section 3.1(b) in exchange for outstanding shares of ASARCO Common Stock (such
cash and shares of Parent Common Stock, together with any dividends or
distributions with respect thereto with a record date after the Effective Time,
any Excess Shares and any cash (including cash proceeds from the sale of the
Excess Shares) payable in lieu of any fractional shares of Parent Common Stock
being hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of an ASARCO Certificate whose shares were converted into the ASARCO Merger
Consideration pursuant to Section 3.1(b), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
ASARCO Certificates shall pass, only upon delivery of the ASARCO Certificates to
the Exchange Agent and shall be in such form and have such other provisions as
ASARCO and Parent may reasonably specify), and (ii) instructions for use in
effecting the surrender of the ASARCO Certificates in exchange for the ASARCO
Merger Consideration. Upon surrender of an ASARCO Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such ASARCO Certificate shall be entitled to receive in exchange
therefor (i) a check in the amount equal to the cash, if any, which such holder
has the right to receive pursuant to the provisions of this Article III and (ii)
a Parent Certificate representing that number of whole shares of Parent Common
Stock, if any, which such holder has the right to receive pursuant to the
provisions of this Article III, certain dividends or other distributions in
accordance with Section 3.2(c) and cash in lieu of any fractional share in
accordance with Section 3.2(e). The ASARCO Certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of ASARCO Common
Stock not registered in the transfer records of ASARCO, the applicable ASARCO
Merger Consideration may be issued or paid to a person other than the person in
whose name the ASARCO Certificate so surrendered is registered if such ASARCO
Certificate shall be properly endorsed or otherwise be in proper form for
transfer, and the person requesting such issuance shall pay all transfer or
other non-income Taxes required by reason of the issuance of ASARCO Merger
Consideration to a person other than the registered holder of such ASARCO
Certificate or establish to the satisfaction of Parent that such Tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
3.2, each ASARCO Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the applicable
ASARCO Merger Consideration into which the shares of ASARCO Common Stock
formerly represented by such ASARCO Certificate have been converted, certain
dividends or other distributions in accordance with Section 3.2(c) and cash in
lieu of any fractional share in accordance with Section 3.2(e). No
11
interest will be paid or will accrue on any cash payable to holders of ASARCO
Certificates pursuant to the provisions of this Article III.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered ASARCO Certificate with respect to the shares of Parent Common
Stock represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 3.2(e), and all such
dividends, other distributions and cash in lieu of fractional shares of Parent
Common Stock shall be paid by Parent to the Exchange Agent and shall be included
in the Exchange Fund, in each case until the surrender of such ASARCO
Certificate in accordance with this Article III. Subject to the effect of
applicable escheat or similar Laws, following surrender of any such ASARCO
Certificate there shall be paid to the holder of the Parent Certificate
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends or
other distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Parent Common Stock and the amount of any
cash payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 3.2(e), and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and with a payment date
subsequent to such surrender payable with respect to such whole shares of Parent
Common Stock. Parent shall make available to the Exchange Agent cash for these
purposes.
(d) No Further Ownership Rights in ASARCO Common Stock. All
ASARCO Merger Consideration issued or paid upon the surrender for exchange of
ASARCO Certificates in accordance with the terms of this Article III shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of ASARCO Common Stock theretofore represented by such
ASARCO Certificates, subject, however, to the ASARCO Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been authorized or made by
ASARCO on such shares of ASARCO Common Stock which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the ASARCO Surviving Corporation of the shares of ASARCO
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, ASARCO Certificates are presented to the ASARCO
Surviving Corporation or the Exchange Agent for any reason, they shall be
cancelled and exchanged as provided in this Article III, except as otherwise
provided by Law.
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7 (e) No Fractional Shares. (i) No Parent Certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of ASARCO Certificates, no dividend or distribution of
Parent shall relate to such fractional share interests, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a
shareholder of Parent.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent will determine the excess of (A) the number of whole
shares of Parent Common Stock delivered to the Exchange Agent by
Parent pursuant to Section 3.2(a) for exchange pursuant to Section 3.1
for outstanding shares of ASARCO Common Stock over (B) the aggregate
number of whole shares of Parent Common Stock to be distributed to
holders of ASARCO Common Stock pursuant to Section 3.2(b) (such excess
being herein called the "Excess Shares"). Following the Effective
Time, the Exchange Agent will, on behalf of former shareholders of
ASARCO, sell the Excess Shares at then-prevailing prices on the New
York Stock Exchange, Inc. (the "NYSE"), all in the manner provided in
Section 3.2(e)(iii).
(iii) The sale of the Excess Shares by the Exchange Agent will be
executed on the NYSE through one or more member firms of the NYSE and
will be executed in round lots to the extent practicable. The Exchange
Agent will use reasonable efforts to complete the sale of the Excess
Shares as promptly following the Effective Time as, in the Exchange
Agent's sole judgment, is practicable consistent with obtaining the
best execution of such sales in light of prevailing market conditions.
Until the net proceeds of such sale or sales have been distributed to
the holders of ASARCO Common Stock, the Exchange Agent will hold such
proceeds in trust for the holders of ASARCO Common Stock (the "Common
Shares Trust"). The Parent will pay all commissions, transfer Taxes
and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent incurred in connection with such
sale of the Excess Shares. The Exchange Agent will determine the
portion of the Common Shares Trust to which each holder of ASARCO
Common Stock is entitled, if any, by multiplying the amount of the
aggregate net proceeds comprising the Common Shares Trust by a
fraction, the numerator of which is the amount of the fractional share
interest to which such holder of ASARCO Common Stock is entitled
(after taking into account all shares of ASARCO Common Stock held at
the Effective Time by such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all holders of
ASARCO Common Stock are entitled.
13
(iv) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of ASARCO Common Stock with
respect to any fractional share interests, the Exchange Agent will
make available such amounts to such holders of ASARCO Common Stock
subject to and in accordance with the terms of Section 3.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the ASARCO Certificates six
months after the Effective Time shall be delivered to Parent upon demand, and
any holders of the ASARCO Certificates who have not theretofore complied with
this Article III shall thereafter look only to Parent for payment of their claim
for ASARCO Merger Consideration, any cash in lieu of fractional shares of Parent
Common Stock and any dividends or distributions with respect to Parent Common
Stock.
(g) No Liability. None of Parent, ASARCO or the Exchange
Agent shall be liable to any person in respect of any shares of Parent Common
Stock (or dividends or distributions with respect thereto) or cash from the
Exchange Fund in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. If any ASARCO Certificate
shall not have been surrendered prior to seven years after the Effective Time
(or immediately prior to such earlier date on which any ASARCO Merger
Consideration, any cash payable to the holder of such ASARCO Certificate
pursuant to this Article III or any dividends or distributions payable to the
holder of such ASARCO Certificate would otherwise escheat to or become the
property of any governmental body or authority) any such ASARCO Merger
Consideration or cash, dividends or distributions in respect of such ASARCO
Certificate shall, to the extent permitted by applicable Law, become the
property of the ASARCO Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
(h) Lost Certificates. If any ASARCO Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such ASARCO Certificate to be lost, stolen or destroyed and,
if required by the ASARCO Surviving Corporation, the posting by such person of a
bond in such reasonable amount as the ASARCO Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
ASARCO Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed ASARCO Certificate the ASARCO Merger Consideration and, if
applicable, any cash in lieu of fractional shares, and unpaid dividends and
distributions on shares of Parent Common Stock as may be deliverable in respect
thereof pursuant to this Agreement.
14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Except as set forth in the disclosure schedule delivered by
Parent to ASARCO prior to the execution of this Agreement (the "Parent
Disclosure Schedule"), Parent hereby represents and warrants to ASARCO, and,
except as set forth in the disclosure schedule delivered by ASARCO to Parent
prior to the execution of this Agreement (the "ASARCO Disclosure Schedule"),
ASARCO hereby represents and warrants to Parent, in each case as set forth in
this Article IV, with the party making such representations and warranties being
referred to as the "Representing Party" and such Representing Party's Disclosure
Schedule as the "Representing Party's Disclosure Schedule." Notwithstanding the
foregoing, any representation or warranty which expressly refers to ASARCO or
Parent is being made solely by ASARCO or Parent, as the case may be.
Section 4.1 Organization, Qualification, Etc.
(a) The Representing Party is a corporation duly organized,
validly existing and in good standing (or other equivalent status) under the
laws of the jurisdiction of its incorporation and has the corporate power and
authority to own, operate and lease all of its properties and assets and to
carry on its business as it is now being conducted or presently proposed to be
conducted and is duly qualified to do business and is in good standing (or other
equivalent status) in each jurisdiction in which the ownership, operation or
leasing of its properties or assets or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so qualified
or in good standing (or other equivalent status) would not, individually or in
the aggregate, have a Material Adverse Effect on the Representing Party and its
Subsidiaries, taken as a whole. As used in this Agreement, any reference to any
state of facts, event, change or effect having a "Material Adverse Effect" on or
with respect to a Representing Party, means such state of facts, event, change
or effect that has had or would reasonably be expected to have a material
adverse effect on the business, results of operations or financial condition of
the Representing Party and its Subsidiaries, taken as a whole; provided,
however, that any adverse effect that copper prices have had or may have on the
business, results of operations or financial condition of the Representing Party
and its Subsidiaries, taken as a whole, shall not be deemed a Material Adverse
Effect for purposes of this Agreement. The copies of each
15
Representing Party's Certificate of Incorporation and Bylaws which have been
delivered to the other Representing Party are complete and correct and in full
force and effect.
(b) Each of the Representing Party's Significant Subsidiaries
is a corporation duly organized, validly existing and in good standing (or other
equivalent status) under the laws of its jurisdiction of incorporation or
organization, has the power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted or
presently proposed to be conducted, and is duly qualified to do business and is
in good standing (or equivalent status) in each jurisdiction in which the
ownership, operation or leasing of its properties or assets or the conduct of
its business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing (or other equivalent status)
would not, individually or in the aggregate, have a Material Adverse Effect on
the Representing Party. Each Representing Party has made available to the other
Representing Party complete and correct copies of the certificate of
incorporation, bylaws or other similar governing documents which are in full
force and effect for each of such Representing Party's Significant Subsidiaries
that are not directly or indirectly wholly owned.
(c) All the outstanding shares of capital stock of, or other
ownership interests in, the Representing Party's Subsidiaries are validly
issued, fully paid and non-assessable and are owned of record and beneficially
by such Representing Party, directly or indirectly, free and clear of all
Encumbrances. As used in this Agreement, the term "Encumbrance" means any
mortgage, pledge, lien, charge, encumbrance, defect, security interest, claim,
option or restriction of any kind. There are no (i) securities of the
Representing Party or any of its Subsidiaries convertible into or exchangeable
or exercisable for shares of capital stock or other voting securities or
ownership interests in any of the Representing Party's Subsidiaries, (ii)
warrants, calls, options or other rights to acquire from the Representing Party
or any of its Subsidiaries, or any obligations of the Representing Party or any
of its Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for, any capital stock, voting securities or ownership interests in
any of the Representing Party's Subsidiaries, or (iii) obligations of the
Representing Party or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding securities of the Representing Party's Subsidiaries or
to issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Except for the Representing Party's Subsidiaries, as set
forth in Section 4.1(d) of the Representing Party's Disclosure Schedule or the
Representing Party's (or any of its Subsidiaries') SEC Reports, and in respect
of minerals exploration or development agreements in the ordinary course of
business, the Representing Party
16
(excluding employee pension or benefit plans) does not own any securities of, or
have any debt or equity investment in, or loans outstanding to, any corporation,
partnership, joint venture, limited liability company or other entity. The
Representing Party is not subject to any contractual obligation under which it
may be required to advance or contribute capital to any entity, except in
respect of minerals exploration or development agreements in the ordinary course
of business.
Section 4.2 Capital Stock.
(a) Section 4.2(a) of the Representing Party's Disclosure
Schedule sets forth as of September 30, 1999:
(i) the number of authorized shares of each class or series of capital
stock of theRepresenting Party;
(ii) the number of shares of each class or series of capital stock of
the Represent ing Party which are issued and outstanding;
(iii) the number of shares of each class or series of capital stock
which are held in the treasury of such Representing Party;
(iv) the number of shares of each class or series of capital stock of
the Represent ing Party which are reserved for issuance, indicating
each specific reservation; and
(v) the number of shares of each class or series of capital stock of
such Representing Party which are subject to employee stock options or
other rights to purchase or receive capital stock granted under such
Representing Party's stock option or other stock based employee or
non-employee director benefit plans, indicating the name of the plan,
the date of grant, the number of shares and the exercise price
thereof.
(b) All of the issued and outstanding shares of capital stock
of the Representing Party have been validly issued and are fully paid and
nonassessable. Except as set forth in Section 4.2(a) of the Representing Party's
Disclosure Schedule, there are no authorized, issued, reserved for issuance or
outstanding (i) shares of capital stock or voting securities of the Representing
Party, (ii) securities convertible into or exchangeable for shares of capital
stock or voting securities of the Representing Party, (iii) warrants, calls,
options or other rights to acquire from the Representing Party or any of its
Subsidiaries, or any obligation of the Representing Party or any of its
Subsidiaries
17
to issue, any shares of capital stock or voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of the Representing Party, and (iv) there are no outstanding
obligations of the Representing Party to repurchase, redeem or otherwise acquire
any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities.
Section 4.3 Corporate Authority Relative to this Agreement.
(a) Parent has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of Parent, and, except for the approval of the issuance of
the Parent Common Stock in the ASARCO Merger (the"Share Issuance") by its
shareholders, no other corporate proceedings on the part of Parent are necessary
to authorize the consummation of the transactions contemplated hereby. The Board
of Directors of Parent has determined that the transactions contemplated by this
Agreement are in the best interests of Parent and its shareholders and to
recommend to such shareholders that they approve the Share Issuance. This
Agreement has been duly and validly executed and delivered by Parent and,
assuming this Agreement constitutes a valid and binding agreement of the other
parties hereto, this Agreement constitutes a valid and binding agreement of
Parent, enforceable against Parent in accordance with its terms (except insofar
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
(b) ASARCO has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of ASARCO, and, except for the approval of this Agreement by
its shareholders, no other corporate proceedings on the part of ASARCO are
necessary to authorize the consummation of the transactions contemplated hereby.
The Board of Directors of ASARCO has taken all appropriate action so that none
of Parent or SubA will be (i) an "interested stockholder" within the meaning of
Section 14A:10A-3 of the NJBCA or (ii) an "interested shareholder" within the
meaning of the Certificate of Incorporation of ASARCO by virtue of Parent and
SubA entering into this Agreement and consummating the transactions contemplated
hereby. The Board of Directors of ASARCO has determined that the transactions
contemplated by this Agreement are in the best interests of ASARCO and its
shareholders and to recommend to such shareholders that they
18
approve this Agreement. This Agreement has been duly and validly executed and
delivered by ASARCO and, assuming this Agreement constitutes a valid and binding
agreement of the other parties hereto, this Agreement constitutes a valid and
binding agreement of ASARCO, enforceable against ASARCO in accordance with its
terms (except insofar as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, or by principles governing the availability of equitable
remedies).
Section 4.4 Non-Contravention; Consents and Approvals.
(a) None of the execution, delivery or performance of this
Agreement by the Representing Party or the consummation by such Representing
Party of the transactions contemplated hereby will (i) violate the certificate
of incorporation or the bylaws or other similar governing documents of the
Representing Party or any of its Subsidiaries, (ii) except for the Required
Third Party Consents, result in the 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, vesting, payment, exercise, acceleration,
suspension or revocation) under any of the provisions of any note, bond,
mortgage, deed of trust, security interest, indenture, license, contract,
agreement, plan or other instrument or obligation to which the Representing
Party or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound (the "Representing Party Agreements"),
(iii) except for the Required Statutory Approvals, violate any order, writ,
injunction, decree, judgment, permit, license, statute, law, ordinance, policy,
rule or regulation ("Law") of any court, tribunal or administrative,
governmental or regulatory body, agency, commission, division, department,
public body or other authority, whether federal, state, local or foreign
(individually, a "Governmental Entity") applicable to the Representing Party or
any of its Subsidiaries or any of their respective property or assets, or (iv)
result in the creation or imposition of any Encumbrance on any asset of the
Representing Party or any of its Subsidiaries, except in the case of clauses
(ii), (iii) and (iv) for violations, breaches, defaults, terminations,
cancellations, accelerations or creations which would not in the aggregate have
a Material Adverse Effect on the Representing Party and its Subsidiaries, taken
as a whole, or prevent or delay the consummation of the transactions
contemplated hereby.
(b) Section 4.4(b)(i) of the Representing Party's Disclosure
Schedule sets forth a list of all third party consents and approvals required to
be obtained under the Representing Party Agreements prior to the consummation of
the transactions contemplated by this Agreement the failure of which to obtain
would have, individually or in the aggregate, a Material Adverse Effect on the
Representing Party and its
19
Subsidiaries, taken as a whole (the "Required Third Party Consents"). Section
4.4(b)(ii) of the Representing Party's Disclosure Schedule sets forth a list of
all notices to, filings and registrations with, and permits, authorizations,
consents and approvals of, Governmental Entities required to be made or obtained
from Governmental Entities prior to the consummation of the transactions
contemplated by this Agreement the failure of which to obtain would have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party and its Subsidiaries, taken as a whole (the "Required Statutory
Approvals").
Section 4.5 Reports and Financial Statements. The
Representing Party has previously furnished or made available to the other
Representing Party complete and correct copies of:
(a) such Representing Party's (and any of its Subsidiaries')
Annual Reports on Form 10-K filed with the Securities and Exchange Commission
(the "SEC") for each of the years ended December 31, 1996 through 1998;
(b) such Representing Party's (and any of its Subsidiaries')
Quarterly Reports on Form 10-Q filed with the SEC for each of the fiscal
quarters ended following such Representing Party's last fiscal year end;
(c) each definitive proxy statement filed by such
Representing Party or any of its Subsidiaries with the SEC since March 1, 1996;
(d) each final prospectus filed by such Representing Party
with the SEC since December 31, 1995; and
(e) all Current Reports on Form 8-K filed by such
Representing Party with the SEC since January 1, 1998.
As of their respective dates, such reports, proxy statements and prospectuses
(collectively, with any amendments, supplements and exhibits thereto, the "SEC
Reports") (i) complied as to form in all material respects with the applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Exchange Act, and the rules and regulations promulgated thereunder, and (ii)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any SEC Report of
the Representing Party has been revised or superseded by an SEC Report
subsequently filed by the Representing Party, none of the
20
Representing Party's SEC Reports contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The audited consolidated financial
statements and unaudited consolidated interim financial statements included in
the Representing Party's SEC Reports (including any related notes and schedules)
fairly present the financial position of the Representing Party and its
consolidated Subsidiaries as of the dates thereof and the results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end adjustments), in each case in accordance with
past practice and GAAP consistently applied during the periods involved (except
as otherwise disclosed in the notes thereto). Since January 1, 1998, the
Representing Party has timely filed all reports, registration statements and
other filings required to be filed by it with the SEC under the rules and
regulations of the SEC.
Section 4.6 Environmental Matters.
(a) Except for Environmental Claims disclosed in or referred
to in Section 4.6(b) of the Disclosure Schedule, as of the date of this
Agreement, each of the Representing Party and its Subsidiaries has obtained all
licenses, permits, authorizations, approvals and consents from Governmental
Entities which are required under any applicable Environmental Law in respect of
its business, properties, assets and operations ("Environmental Permits"),
except (i) for such permits as to which due and proper application is pending,
and (ii) for such failures to have Environmental Permits which, individually or
in the aggregate, are not reasonably expected to have a Material Adverse Effect
on the Representing Party and its Subsidiaries, taken as a whole. Each of such
Environmental Permits is in full force and effect, and each of the Representing
Party and its Subsidiaries is in compliance with the terms and conditions of all
such Environmental Permits and with all applicable Environmental Laws, except
for such exceptions as would not, individually or in the aggregate, have a
Material Adverse Effect on the Representing Party and its Subsidiaries, taken as
a whole.
(b) Except for Environmental Claims disclosed in or referred
to in Section 4.6(b) of the Disclosure Schedule, as of the date of this
Agreement, there is no Environmental Claim filed, pending, or to the best
knowledge of the Representing Party threatened or in process, against the
Representing Party or any of its Subsidiaries or any person whose liability for
such Environmental Claim the Representing Party or any of its Subsidiaries has
or may have retained or assumed either contractually or by operation of Law,
that would, individually or in the aggregate, have a Material Adverse Effect on
the Representing Party and its Subsidiaries, taken as a whole.
21
(c) Except as disclosed or referred to in Section 4.6(c) of
the Disclosure Schedule, no Encumbrances have arisen under or pursuant to any
Environmental Law on any property, site or facility owned, operated or leased by
the Representing Party or any of its Subsidiaries, except for such Encumbrances
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Representing Party and its Subsidiaries, taken as a whole, and no
action of any Governmental Entity has been taken or, to the best knowledge of
the Representing Party, is threatened or in process which could subject any of
such properties to such Encumbrances, except for such action which would not,
individually or in the aggregate, have a Material Adverse Effect on the
Representing Party and its Subsidiaries, taken as a whole.
(d) As used in this Agreement:
(i) "Environmental Claim" means any claim, action, cause of action,
order, investigation or notice (written or oral) by any person
alleging potential or actual liability (including, without limitation,
potential or actual liability for investigation, evaluation, cleanup,
removal actions, remedial actions, response actions, natural resources
damages, property damages, personal injuries or penalties) arising out
of, based on or resulting from any Environmental Law, including any
claim under CERCLA, and shall include any request for information
under CERCLA or any comparable state or local Law.
(ii) "Environmental Law" means any Law relating to (a) the environment
or pollution, environmental matters, the protection of the
environment, or the protection of human health and safety from
environmental concerns, (b) actual or threatened emissions,
discharges, or releases of pollutants, contaminants, chemicals or
solid, industrial, toxic or hazardous substances, wastes or
constituents into the environment, and (c) the presence, manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials.
(iii) "Hazardous Materials" mean (a) any petroleum or petroleum
products and radioactive materials, (b) any chemicals, constituents,
materials, or substances defined or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous substances," "toxic substances " and related
materials, as such materials are defined in any Environmental Law, and
(c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Governmental Entity.
22
Section 4.7 Employee Benefit Plans; ERISA.
(a) Except as set forth in the Representing Party's SEC
Reports or as would not have a Material Adverse Effect on the Representing Party
and its Subsidiaries, taken as a whole, (i) all Employee Benefit Plans (other
than any Employee Benefit Plan that is a "multiemployer plan" within the meaning
of Section 3(37) of ERISA (a "Multiemployer Plan")) of the Representing Party
are in material compliance with all applicable requirements of Law, including
ERISA and the Code, and (ii) neither the Representing Party nor any of its
Subsidiaries nor any ERISA Affiliate has any liabilities or obligations with
respect to any such Employee Benefit Plans, whether accrued, contingent or
otherwise, that are not otherwise reflected on the Representing Party's
financial statements, nor to the best knowledge of the Representing Party, are
any such liabilities or obligations expected to be incurred. Except as described
in the Representing Party's (or any of its Subsidiaries') SEC Reports or as set
forth in Section 4.7(a) of the Representing Party's Disclosure Schedule, the
execution and delivery of, and performance of the transactions contemplated by
this Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any Employee Benefit Plan of the
Representing Party that will or may result in acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee. The only severance agreements or
severance policies applicable to the Representing Party or any of its
Subsidiaries are the agreements and policies specifically described in Section
4.7(a) of the Representing Party's Disclosure Schedule.
(b) With respect to each of its Plans, the Representing Party
has heretofore made available to the other Representing Party complete and
correct copies of each of the following documents, as applicable: (i) a copy of
the Plan and any amendments thereto; (ii) a copy of the most recent annual
report; (iii) a copy of the most recent actuarial report; (iv) a copy of the
most recent Summary Plan Description and all material modifica tions; (v) a copy
of the trust or other funding agreement and any amendments thereto; and (vi) the
most recent determination letter received from the Internal Revenue Service (the
"IRS") with respect to each Plan that is intended to be qualified under Section
401 of the Code and all notices of reportable events received following receipt
of such letter. Each Representing Party will deliver to the other Representing
Party a copy of each Foreign Plan within thirty days following the date hereof.
(c) Section 4.7(c) of the Representing Party's Disclosure
Schedule sets forth a list of each employee of the Representing Party (or any
Subsidiary) who is a party to any agreement (whether written or oral) with
respect to such person's
23
employment by the Representing Party or a Subsidiary, other than offer letters
which do not have guaranteed periods of employment and statutory employment
agreements under foreign Laws, and which provide for annual compensation in
excess of $100,000. The Representing Party has made available to the other
Representing Party a complete and correct copy of each such written employment
agreement and a complete and correct summary of each such oral agreement.
(d) No liability under Title IV of ERISA has been incurred by
the Representing Party or any ERISA Affiliate within the past six years that has
not been satisfied in full. To the best knowledge of the Representing Party, no
condition exists that presents a material risk to the Representing Party, any of
its Subsidiaries or any ERISA Affiliate of incurring a liability under such
Title that is reasonably likely to have a Material Adverse Effect on the
Representing Party. The Pension Benefit Guaranty Corporation has not instituted
proceedings to terminate any of the Employee Benefit Plans, and, to the
knowledge of the Representing Party, no condition exists that presents a
material risk that such proceedings will be instituted. Except as would not have
a Material Adverse Effect on the Representing Party, with respect to each of the
Employee Benefit Plans that is subject to Title IV of ERISA, the present value
of accrued benefits under such Employee Benefit Plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such Employee Benefit Plan's actuary with respect to such Employee
Benefit Plan, did not, as of its latest valuation date, exceed the then current
value of the assets of such Employee Benefit Plan allocable to such accrued
benefits, and there have been no changes since such latest valuation date which
would cause the present value of such accrued benefits to exceed the current
value of such assets. None of the Employee Benefit Plans or any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each of the
Employee Benefit Plans ended prior to the date of this Agreement. None of the
Employee Benefit Plans is a Multiemployer Plan. To the knowledge of the
Representing Party each of the Employee Benefit Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified and
the trusts maintained thereunder are exempt from taxation under Section 501(a)
of the Code. Except as set forth in Section 4.7(d) of the ASARCO Disclosure
Schedule, no Employee Benefit Plan provides benefits, including without
limitation death or medical benefits (whether or not insured), with respect to
current or former employees after retirement or other termination of service
(other than coverage mandated by applicable Law or benefits, the full cost of
which is borne by the current or former employee). There are no material pending
or threatened claims by or on behalf of any Employee Benefit Plan, by any
employee or beneficiary covered under any such Employee Benefit Plan, or
otherwise involving any such Employee Benefit Plan
24
(other than routine claims for benefits). No prohibited transaction has occurred
with respect to any Employee Benefit Plan that would result, directly or
indirectly, in the imposition of an excise Tax or other liability under the Code
or ERISA, except for such a Tax or other liability that would not have a
Material Adverse Effect. Except as would not have a Material Adverse Effect on
the Representing Party, with respect to each Foreign Plan: (i) all amounts
required to be reserved on account of each Foreign Plan have been so reserved in
accordance with reasonable accounting practices prevailing in the country where
such Foreign Plan is established, and (ii) each Foreign Plan required to be
registered with a Governmental Entity has been registered, has been maintained
in good standing with the appropriate Governmental Entities, and has been
maintained and operated in accordance with its terms and applicable Law.
(e) Except as set forth in Section 4.7(a) and (d) of the
ASARCO Disclosure Schedule no director or officer or other employee of such
Representing Party will become entitled to any termination, retirement,
severance or similar payment, benefit or enhanced or accelerated benefit
(including any acceleration of vesting or lapse of restrictions, repurchase
rights or obligations with respect to any employee stock option or other benefit
under any stock option plan or incentive or compensation plan or arrangement) as
a result of the transactions contemplated by this Agreement (either standing
alone or in conjunction with any additional or subsequent events).
(f) Except as set forth in Section 4.7(f) of the ASARCO
Disclosure Schedule, any amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transactions contemplated by this Agreement by any employee, officer or
director of the Representing Party or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employee benefit plan or other
compensation arrangement currently in effect would not be characterized as an
"excess parachute payment" or a "parachute payment" (as such terms are defined
in Section 280G(b)(1) of the Code).
(g) As used in this Agreement
(i) "Employee Benefit Plan" means any material Plan entered into,
established, maintained, sponsored, contributed to or required to be
contributed to by the Representing Party, any of its Subsidiaries or
ERISA Affiliates for the benefit of the current or former employees or
directors of the Representing Party or any of its Subsidiaries and
existing on the date of this Agreement or at any time subsequent
thereto and on or prior to the Effective Time;
25
(ii) "Foreign Plan" shall refer to each material plan, program or
contract that is subject to or governed by the Laws of any
jurisdiction other than the United States, and which would have been
treated as an Employee Benefit Plan had it been a United States plan,
program or contract;
(iii) "Plan" means any employment, bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock
purchase, stock option, stock ownership, stock appreciation rights,
phantom stock, leave of absence, layoff, vacation, day or dependent
care, legal services, cafeteria, life, health, medical, accident,
disability, worker's compensation or other insurance, severance,
separation, termination, change of control or other benefit plan,
agreement, practice policy, program or arrangement of any kind,
whether written or oral, other than a Foreign Plan, including, but not
limited to any "employee benefit plan" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder ("ERISA"); and
(iv) "ERISA Affiliate" means, with respect to any Representing Party,
any entity, trade or business that is a member of the same controlled
group as such Representing Party (within the meaning of Sections
414(b), (c), (m) or (o) of the Code).
Section 4.8 Information Statement; Registration Statement;
Other Information. None of the information with respect to the Representing
Party or its Subsidiaries to be included in the Schedule 14D-9, the Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1"), the Information Statement or the Registration
Statement will, in the case of the Information Statement, the Schedule 14D-9,
Schedule 14D-1, or any amendments or supplements thereto at the time that such
document is mailed, and at the time of the Parent Shareholders Meeting and the
ASARCO Shareholders Meeting, or, in the case of the Registration Statement, at
the time it becomes effective, 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
Representing Party with respect to information supplied in writing by the other
Representing Party or any of its affiliates specifically for inclusion in the
Information Statement. The Information Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder. The letters to shareholders, notices of
meeting, information statement and forms of proxies to be distributed to
shareholders in connection with the ASARCO
26
Merger and any schedules required to be filed with the SEC in connection
therewith are collectively referred to herein as the "Information Statement."
Section 4.9 ASARCO Rights Plan. ASARCO represents and
warrants that the Board of Directors of ASARCO has taken all necessary action to
render the Rights Agreement dated as of July 26, 1989, as amended, between
ASARCO and First Chicago Trust Company of New York and the Rights Agreement
between ASARCO and The Bank of New York, dated as of January 28, 1998,
inapplicable to the transactions contemplated by this Agreement.
Section 4.10 Tax Matters.
(a) All federal, state, local and foreign Tax Returns
required to be filed by or on behalf of the Representing Party, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which the Representing Party or any of its Subsidiaries (i) is a member (a
"Current Representing Party Group") or (ii) was a member during six years prior
to the date hereof but is not currently a member, but only insofar as any such
Tax Return relates to a taxable period ending on a date within the last six
years (a "Past Representing Party Group," together with Current Representing
Party Groups, a "Represent ing Party Affiliated Group") have been timely filed,
and all such Tax Returns filed are complete and accurate except to the extent
any failure to file or any inaccuracies in filed Tax Returns would not,
individually or in the aggregate, have a Material Adverse Effect on such
Representing Party (it being understood that the representations made in this
Section, to the extent that they relate to Past Representing Party Groups, are
made to the knowledge of the Representing Party). All Taxes due and owing by the
Representing Party, any Subsidiary of the Representing Party or any Representing
Party Affiliated Group have been paid, or adequately reserved for, except to the
extent any failure to pay or reserve would not, individually or in the
aggregate, have a Material Adverse Effect on the Representing Party. There is no
audit examination, deficiency, refund litigation, proposed adjustment or matter
in controversy with respect to any Taxes due and owing by the Representing
Party, any Subsidiary of the Representing Party or any Representing Party
Affiliated Group which would, individually or in the aggregate, have a Material
Adverse Effect on the Representing Party. All assessments for Taxes due and
owing by the Representing Party, any Subsidiary of the Representing Party or any
Representing Party Affiliated Group with respect to completed and settled
examinations or concluded litigation have been paid. As soon as practicable
after the public announcement of the execution of the Merger
27
Agreement, the Representing Party will provide the other party with written
schedules of (i) the taxable years of the Representing Party for which the
statutes of limitations with respect to federal income Taxes have not expired,
and (ii) with respect to federal income Taxes, those years for which
examinations have been completed, those years for which examinations are
presently being conducted, and those years for which examinations have not yet
been initiated. The Representing Party and each of its Subsidiaries have
complied in all material respects with all rules and regulations relating to the
withholding of Taxes, except to the extent any such failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect on the
Representing Party.
(b) Neither the Representing Party nor any of its
Subsidiaries has (i) entered into a closing agreement or similar agreement with
a taxing authority relating to Taxes of the Representing Party or any of its
Subsidiaries with respect to a taxable period for which the statute of
limitations is still open, or (ii) with respect to U.S. federal income Taxes,
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of, any such income Tax, in either
case, that is still outstanding. There are no Encumbrances relating to Taxes
upon the assets of the Representing Party other than Encumbrances relating to
Taxes not yet due, except as would not have a Material Adverse Effect on the
Representing Party. Neither the Representing Party nor any of its Subsidiaries
is a party to any agreement relating to the allocating or sharing of Taxes,
other than an agreement with each other.
(c) Neither the Representing Party nor any of its
Subsidiaries knows of any fact or has taken any action that could reasonably be
expected to prevent the ASARCO Merger from constituting a transaction described
in Section 368(a) of the Code.
For purposes of this Agreement: (i) "Taxes" means any and all federal, state,
local, foreign or other taxes of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including, without limitation, taxes or other
charges on or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, severance, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added, and (ii) "Tax Return" means any return, report or
similar statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
for refund, amended return or declaration of estimated Tax.
28
Section 4.11 Opinion of Financial Advisors.
(a) The Board of Directors of ASARCO has received the opinion
of Credit Suisse First Boston Corporation, dated the date of this Agreement,
substantially to the effect that, as of such date, the consideration to be
received by holders of ASARCO Common Stock in the ASARCO Offer and the ASARCO
Merger, is fair to the holders of ASARCO Common Stock from a financial point of
view.
(b) The Board of Directors of Parent has received the opinion
of Xxxxxx Xxxxxxx & Co. Incorporated., dated the date of this Agreement,
substantially to the effect that, as of such date, the consideration to be paid
by Parent pursuant to this Agreement is fair to Parent from a financial point of
view.
Section 4.12 Required Vote.
(a) The affirmative vote of the holders of shares of Parent
Common Stock representing a majority of the shares voting at the Parent
Shareholders Meeting, provided that at least 50% of the outstanding Parent
Common Stock that is entitled to vote, votes at the Parent Shareholders Meeting
(the "Parent Shareholder Approval"), is required to approve the Share Issuance.
No other vote of the shareholders of Parent is required by Law, the Certificate
of Incorporation or the Bylaws of Parent or otherwise in order for Parent to
consummate the ASARCO Merger and the transactions contemplated hereby.
(b) The affirmative vote of the holders of 80% of the
outstanding shares of ASARCO Common Stock entitled to vote at the ASARCO
Shareholders Meeting (the "ASARCO Shareholder Approval") is required to approve
this Agreement. No other vote of the shareholders of ASARCO is required by Law,
the Certificate of Incorporation or the Bylaws of ASARCO or otherwise in order
for ASARCO to consummate the ASARCO Merger and the transactions contemplated
hereby.
Section 4.13 Absence of Certain Changes. Except as set forth
in Section 4.13 of the ASARCO Disclosure Schedule, since December 31, 1998, and,
other than with respect to clause (a) below, prior to the date hereof, except as
set forth in the Representing Party's (or any of its Subsidiaries') SEC Reports
filed prior to the date hereof, the Representing Party and its Subsidiaries have
conducted their respective businesses in the ordinary course, consistent with
past practice and there has not been:
29
(a) any event, occurrence or development (including the
discovery of new or additional information concerning an existing environmental
condition) which, individually or in the aggregate, would have a Material
Adverse Effect on the Representing Party;
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of the
Representing Party (other than regular quarterly cash dividends payable by the
Representing Party in respect of shares of its capital stock consistent with
past practice) or any repurchase, redemption or other acquisition by the
Representing Party or any of its Subsidiaries of any outstanding shares of its
capital stock (except (x) as required by the terms of any employee or stock
option plan or compensation plan or arrangement, (y) in accordance with any
dividend reinvestment plan as in effect as of the date of this Agreement in the
ordinary course of operation of such plan consistent with past practice, and/or
(z) as otherwise permitted by Section 5.1);
(c) any amendment of any material term of any outstanding
security of the Representing Party or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract,
agreement or settlement entered into, by (or judgment, order or decree
affecting) the Representing Party or any of its Subsidiaries relating to its
assets or business (including the acquisition or disposition of any material
amount of assets) or any relinquishment by the Representing Party or any of its
Subsidiaries of any contract or other right, in either case, material to the
Representing Party and its Subsidiaries taken as a whole, other than
transactions, commitments, contracts, agreements or settlements (including
without limitation settlements of litigation and tax proceedings) in the
ordinary course of business consistent with past practice and those contemplated
by this Agreement;
(e) any change prior to the date hereof in any method of
accounting or accounting practice by the Representing Party or any of its
Subsidiaries, except for any such change which is not material or which is
required by reason of a concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or
amendment to any such existing arrangement with) any director, officer or
employee of the Representing Party or any of its Subsidiaries, (ii) entering
into of any employment, deferred compensation, supplemental retirement or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Representing Party or any of its
Subsidiaries, (iii) increase in, or accelerated vesting
30
and/or payment of, benefits under any existing severance or termination pay
policies or employment agreements or (iv) increase in or enhancement of any
rights or features related to compensation, bonus or other benefits payable to
directors, officers or employees of the Representing Party or any of its
Subsidiar ies, in each case, other than in the ordinary course of business
consistent with past practice or as permitted by this Agreement; or
(g) any material Tax election made or changed, any material
audit settled or any material amended Tax Returns filed.
Section 4.14 No Undisclosed Material Liabilities. There are
no liabilities of the Representing Party or any Subsidiary of the Representing
Party of any kind whatsoever, whether accrued, contingent, absolute, determined
or determinable, other than:
(a) liabilities which, individually or in the aggregate,
would not have a Material Adverse Effect on the Representing Party;
(b) liabilities disclosed in the SEC Reports of the
Representing Party or except as disclosed pursuant to Section 4.6 hereof; and
(c) liabilities under or arising as a result of this
Agreement.
Section 4.15 Labor Relations. As of the date of this
Agreement: (i) Section 4.15 of the Representing Party's Disclosure Schedule sets
forth a complete list of each collective bargaining agreement to which the
Representing Party or any of its Subsidiaries is a party, (ii) no labor
organization or group of employees of the Representing Party (or any of its
Subsidiaries) has made a pending demand for recognition or certification, and
there are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the knowledge of the
Representing Party, threatened to be brought or filed, with the National Labor
Relations Board or any other labor relations tribunal or authority, and (iii)
there are no organizing activities, strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances, or other material labor
disputes pending or, to the knowledge of the Representing Party, threatened
against or involving the Representing Party or any of its Subsidiaries.
Section 4.16 No Prior Activities. SubA was formed for the
purpose of effecting a business combination with ASARCO, and does not have any
Subsidiaries and has not undertaken any business or other activities other than
in connection with
31
pursuing such business combination and entering into this Agreement and engaging
in the transactions contemplated hereby.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business Pending the Effective Time.
From and after the date hereof and prior to the Effective Time or the date, if
any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the
"Termination Date"), and except as may be agreed in writing by the other parties
hereto or as may be provided for or permitted pursuant to this Agreement:
(a) each of the parties shall, and shall cause each of its
Subsidiaries to, conduct its operations according to their ordinary and usual
course of business in substantially the same manner as heretofore conducted;
(b) each of the parties shall use its reasonable best
efforts, and cause each of its Subsidiaries to use its reasonable best efforts,
to preserve intact its business organiza tions and goodwill, keep available the
services of its current officers and other key employees and preserve its
relationships with those persons having business dealings with it (including its
relationships with customers, suppliers, employees and business partners);
(c) each of the parties shall confer at such times as any of
the other parties may reasonably request with one or more representatives of
such requesting party to report material operational matters and the general
status of ongoing operations (to the extent such requesting party reasonably
requires such information);
(d) each of the parties shall notify the other parties of any
emergency or other change in the normal course of its or its Subsidiaries'
respective businesses or in the operation of its or its Subsidiaries, respective
properties and of any complaints or hearings (or communications indicating that
the same may be contemplated) of any Governmental Entity if such emergency,
change, complaint, investigation or hearing would have a Material Adverse Effect
on such party;
(e) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, (i) declare, set aside, authorize or pay any
dividends on or make any distribution with respect to its outstanding shares of
stock, except in the case of Parent for regular quarterly cash dividends on the
outstanding shares of Parent Common
32
Stock and in the case of ASARCO and its majority owned subsidiary Southern Peru
Copper Corporation for regular quarterly cash dividends on the outstanding
shares of their common stock and except for cash dividends by a wholly owned
Subsidiary to a parent, or (ii) split, combine or reclassify any of its shares
of capital stock;
(f) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, except (i) in the ordinary course of business
consistent with past practice, (ii) as otherwise provided in this Agreement or
(iii) as required by applicable Law, adopt or amend any Employee Benefit Plan;
(g) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, authorize, propose or announce an intention
to authorize or propose, or enter into an agreement with respect to, any merger,
consolidation or business combination (other than the ASARCO Offer and the
ASARCO Merger and for Parent's Offer to purchase all of the outstanding shares
of common stock of Cyprus Amax Minerals Company and the related merger of Cyprus
Amax Minerals Company with a Subsidiary of Parent), any acquisition of a
material amount of assets or securities, any disposition of a material amount of
assets or securities or any release or relinquishment of any material contract
rights, in each case not in the ordinary course of business;
(h) none of the parties shall, and none of the parties shall
permit its Subsidiaries to, propose or adopt any amendments to its certificate
of incorporation or by-laws or other similar governing documents;
(i) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, issue or authorize the issuance of, or agree
to issue or sell any shares of their capital stock of any class (whether through
the issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise), except for the issuance of shares of Parent
Common Stock by Parent and ASARCO Common Stock by ASARCO upon the exercise of
stock options or other rights to acquire such party's capital stock, in each
case which securities, options and rights are outstanding as of the date of this
Agreement and such issuance is made in accordance with the terms of such
securities, options and rights in effect on the date of this Agreement;
(j) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, except in the ordinary course of business in
connection with employee incentive and benefit plans, programs or arrangements
in existence on the date hereof, purchase or redeem any shares of its stock or
any rights, warrants or options to acquire any such shares;
33
(k) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, incur, assume or prepay any indebtedness or
any other material liabilities, other than indebtedness between such party and a
wholly owned Subsidiary or between wholly owned Subsidiaries, provided, in
either such case, such wholly owned Subsidiaries remain wholly owned
Subsidiaries, and other than in the ordinary course of business consistent with
past practice;
(l) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, sell, lease, license, mortgage or otherwise
encumber or subject to any Encumbrance or otherwise dispose of any of its
properties or assets (including securitizations), other than in the ordinary
course of business consistent with past practice and other than the consummation
of contracts of sale executed and delivered prior to the date hereof;
(m) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, take any action that would reasonably be
expected to cause the ASARCO Merger not to constitute a transaction described in
Section 368(a) of the Code;
(n) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to make any material Tax election or settle or
compromise any material Tax liability, other than in the ordinary course of
business consistent with past practice; and
(o) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, agree, in writing or otherwise, to take any
of the foregoing actions or take any action which would (i) make any
representation or warranty made by such party in Article IV hereof untrue or
incorrect or (ii) result in any of the conditions to the ASARCO Merger set forth
in Article VI not being satisfied.
Section 5.2 Investigation.
(a) Each of Parent and ASARCO shall (and shall cause its
respective Subsidiaries to) afford to one another and to one another's officers,
employees, accountants, counsel and other authorized representatives full and
complete access on reasonable prior notice during normal business hours,
throughout the period prior to the earlier of the Effective Time or the
Termination Date, to its and its Subsidiaries' properties, contracts,
commitments, books, and records (including but not limited to Tax Returns) and
any report, schedule or other document filed or received by it or any of its
34
Subsidiaries pursuant to the requirements of federal or state securities laws or
filed with or sent to the SEC, the Department of Justice, the Federal Trade
Commission or any other Governmental Entity and shall use their reasonable best
efforts to cause their respective representatives and Subsidiaries to furnish
promptly to one another such additional financial and operating data and other
information as to its and its Subsidiaries' respective businesses and properties
as the other or its duly authorized representatives may from time to time
reasonably request; provided, that nothing herein shall require either Parent or
ASARCO or any of their respective Subsidiaries to disclose any information to
the other that would cause significant competitive harm to such disclosing party
or its affiliates if the transactions contemplated by this Agreement are not
consummated. Notwithstanding any provision of this Agreement to the contrary, no
party shall be obligated to make any disclosure in violation of applicable Laws.
(b) Parent and ASARCO will not, and will cause their
respective officers, employees, accountants, counsel and representatives not to,
use any information obtained pursuant to this Section 5.2 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement. Pending consummation of the transactions herein contemplated, each of
Parent and ASARCO will keep confidential, and will cause their respective
officers, employees, accountants, counsel and representatives to keep
confidential, all information and documents obtained pursuant to this Section
5.2 unless such information (i) was already known to it, (ii) becomes available
to it from other sources not known by it to be bound by a confidentiality
obligation, (iii) is independently acquired by it as a result of work carried
out by any of its employees or representatives to whom no disclosure of such
information has been made, (iv) is disclosed with the prior written approval of
the other party or (v) is or becomes readily ascertainable from published
information or trade sources. Upon any termination of this Agreement, each party
will, upon request, collect and deliver to the other party all documents
obtained by it or any of its officers, employees, accountants, counsel and
representatives then in their possession and any copies thereof.
Section 5.3 Shareholder Approvals and Other Cooperation.
(a) If required by applicable Law, as soon as practicable
following consummation of the ASARCO Offer, Parent and ASARCO shall together, or
pursuant to any reasonable allocation of responsibility between them:
(i) prepare and file confidentially with the SEC as soon as is
reasonably practicable the Information Statement in preliminary form
and promptly prepare and cause Parent to file with the SEC a
registration statement on Form S-4 under the Securities Act with
respect to the Parent Common Stock issuable in the
35
ASARCO Merger (or, to the extent practicable, to amend as necessary
the Registration Statement of Parent on Form S-4 (Reg. No. 333-86063),
which was declared effective by the SEC on September 2, 1999 with
respect to the Parent Common Stock) (the "Registration Statement"),
and shall use their reasonable best efforts to have the Information
Statement cleared by the SEC under the Exchange Act and the
Registration Statement declared effective by the SEC under the
Securities Act;
(ii) as soon as is reasonably practicable cause Parent to take all
such action as may be required under state blue sky or securities laws
in connection with the issuance of shares of Parent Common Stock in
the ASARCO Merger and as contemplated by this Agreement;
(iii) promptly prepare and file with the NYSE and such other stock
exchanges as shall be agreed upon listing applications covering the
shares of Parent Common Stock issuable in the ASARCO Merger, upon
exercise of ASARCO stock options, warrants, conversion rights or other
rights or vesting or payment of other ASARCO equity-based awards and
use its reasonable best efforts to obtain, prior to the Effective
Time, approval for the listing of such Parent Common Stock, subject
only to official notice of issuance;
(iv) cooperate with one another in order to lift any injunctions or
remove any other impediment to the consummation of the transactions
contemplated herein; and
(v) cooperate with one another in obtaining (i) an opinion of Shearman
& Sterling, special counsel to Parent, dated as of the date of the
Effective Time, to the effect that the ASARCO Merger will qualify as a
transaction described in Section 368(a) of the Code, and (ii) an
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel
to ASARCO, dated as of the date of the Effective Time, to the effect
that the ASARCO Merger will qualify as a transaction described in
Section 368(a) of the Code. In connection therewith, each of ASARCO
and Parent shall deliver to Shearman & Sterling and Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP customary representation letters in form and
substance reasonably satisfactory to such special counsel and Parent
and ASARCO shall use their reasonable best efforts to obtain any
representation letters drafted by their special counsel from their
respective appropriate shareholders and shall deliver any such letters
obtained to Shearman & Sterling and Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP (the representation letters referred to in this sentence are
collectively, the "Tax Certificates").
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(b) Subject to the limitations contained in Section 5.2,
Parent and ASARCO shall each furnish to one another and to one another's counsel
all such information as may be required in order to effect the foregoing actions
and each represents and warrants to the other that no information furnished by
it in connection with such actions or otherwise in connection with the
consummation of the transactions contemplated by this Agreement will contain any
untrue statement of a material fact or omit to state a material fact required to
be stated in order to make any information so furnished, in light of the
circumstances under which it is so furnished, not misleading.
(c) (i) Parent shall cause an appropriate supplement to the
Xxxxxx Dodge Proxy Statement to be mailed to Parent's shareholders, and ASARCO
shall cause the Information Statement to be mailed to ASARCO's shareholders, in
each case as promptly as practicable after the Registration Statement is
declared effective under the Securities Act.
(ii) Parent shall hold a meeting of its stockholders (the "Parent
Shareholder Meeting") as provided in the Xxxxxx Dodge Proxy Statement
dated September 13, 1999 as supplemented by the Proxy Statement
Supplement dated September 22, 1999 (as the same may be further
amended or supplemented, the "Xxxxxx Dodge Proxy Statement") for the
purpose of obtaining the Parent Shareholder Approval. Parent shall,
through its Board of Directors, recommend to its shareholders the
approval of the Share Issuance and the other transactions contemplated
hereby unless the Board of Directors of Parent determines in good
faith, after consultation with outside counsel, that to do so would be
inconsistent with its fiduciary duties under applicable Law.
Notwithstanding anything herein to the contrary, in the event that
Parent, SubA or any other subsidiary of Parent shall acquire at least
90% of the outstanding shares of each class of capital stock of
ASARCO, pursuant to the ASARCO Offer or otherwise, the parties hereto
agree to take all necessary and appropriate action to cause the ASARCO
Merger to become effective as soon as practicable after such
acquisition, without a meeting of ASARCO shareholders, in accordance
with Section 14A:10-5.1 of the NJBCA and Section 253 of the DGCL.
(iii) ASARCO shall, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of
its shareholders (the "ASARCO Shareholders Meeting") for the purpose
of obtaining the ASARCO Shareholder Approval. ASARCO shall, through
its Board of Directors, subject to the last sentence of Section
5.9(b), recommend to
37
its shareholders the adoption of this Agreement, the ASARCO Merger and
the other transactions contemplated hereby.
(iv) Each of Parent and ASARCO will use their best efforts to hold the
Parent Shareholders Meeting and the ASARCO Shareholders Meeting as
soon as practicable after the date hereof.
(d) Parent shall vote, or cause to be voted, all of the
shares of ASARCO Common Stock then owned by it or any of its Subsidiaries in
favor of the approval and adoption of this Agreement.
Section 5.4 Affiliate Agreements.
ASARCO shall, as soon as practicable, deliver to Parent a
list (reasonably satisfactory to counsel for Parent) setting forth the names and
addresses of all persons who will be, at the time of the ASARCO Shareholders
Meeting, in ASARCO's reasonable judgment, "affiliates" of ASARCO for purposes of
Rule 145 under the Securities Act. ASARCO shall furnish such information and
documents as Parent may reasonably request for the purpose of reviewing such
list. ASARCO shall use its reasonable best efforts to cause each person who is
identified as an "affiliate" in the list furnished pursuant to this Section 5.4
to execute a written agreement on or prior to the mailing of the Joint Proxy
Statement, in substantially the form of Exhibit A hereto.
Section 5.5 ASARCO Employee Stock Options, Incentive and
Benefit Plans.
(a) Simultaneously with the ASARCO Merger, (i) each
outstanding option ("ASARCO Stock Options") and related stock appreciation right
("ASARCO SAR"), if any, to purchase or acquire a share of ASARCO Common Stock
under employee incentive or benefit plans, programs or arrangements and
non-employee director plans presently maintained by ASARCO ("ASARCO Option
Plans") shall be converted into an option (together with a related stock
appreciation right of ASARCO, if applicable) to purchase the number of shares of
Parent Common Stock equal to 0.50266, times the number of shares of ASARCO
Common Stock which could have been obtained prior to the Effective Time upon the
exercise of each such option, at an exercise price per share equal to the
exercise price for each such share of ASARCO Common Stock subject to an option
(and related ASARCO SAR, if any) under the ASARCO Option Plans divided by
0.50266, and all references in each such option (and related ASARCO SAR, if any)
to ASARCO shall be deemed to refer to Parent, where appropriate, and (ii) Parent
shall assume the obligations of ASARCO under the
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ASARCO Option Plans. The other terms of each such ASARCO Stock Option and ASARCO
SAR, and the plans under which they were issued, shall continue to apply in
accordance with their terms, including any provisions providing for acceleration
of vesting or payment.
(b) Simultaneously with the ASARCO Merger, each outstanding
award including restricted stock and phantom stock or common stock equivalents
("ASARCO Award") under any employee incentive or benefit plans, programs or
arrangements and non-employee director plans presently maintained by ASARCO
which provide for grants of equity-based awards shall be amended or converted
into a similar instrument of Parent, in each case with such adjustments to the
terms of such ASARCO Awards as are appropriate to preserve the value inherent in
such ASARCO Awards with no detrimental effects on the holders thereof. The other
terms of each ASARCO Award, and the plans or agreements under which they were
issued, shall continue to apply in accordance with their terms, including any
provisions providing for acceleration of vesting or payment. With respect to any
restricted stock awards as to which the restrictions shall have lapsed on or
prior to the Effective Time in accordance with the terms of the applicable plans
or award agreements, shares of such previously restricted stock shall be
converted in accordance with the provisions of Section 3.1(b).
(c) Prior to the Effective Time, ASARCO shall amend each of
its employee incentive or benefit plans, programs and arrangements and
non-employee director plans, to the extent necessary and appropriate, to reflect
the transactions contemplated by this Agreement, including, but not limited to
the conversion of shares of ASARCO Common Stock held or to be awarded or paid
pursuant to such benefit plans, programs or arrange ments into shares of Parent
Common Stock on a basis consistent with the transactions contemplated by this
Agreement. At or prior to the Effective Time, Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Parent Common Stock for delivery upon exercise of the ASARCO Stock Options.
As soon as practicable after the Effective Time, Parent shall file a
registration statement on Form S-3 or Form S-8, as the case may be (or any
successor or other appropriate forms), with respect to the Parent Common Stock
subject to such ASARCO Stock Options, and shall maintain the effectiveness of
such registration statement and the current status of the prospectus or
prospectuses contained therein, for so long as such ASARCO Stock Options remain
outstanding.
(d) Parent and its Subsidiaries and affiliates agree to honor
in accordance with their terms the ASARCO Employee Benefit Plans, including,
without limitation, any rights or benefits arising thereunder as a result of the
transactions contemplated by this Agreement (either alone or in combination with
any other event).
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It is the intention of the parties hereto that, for a period of one year from
the Effective Time, Parent and its Subsidiaries continue to maintain the ASARCO
Employee Benefit Plans, in each case in accordance with their terms as in effect
at the Effective Time, with only such amendments as are required by applicable
Law or permitted by the terms thereof as in effect at the Effective Time, and
which do not adversely affect the rights of participants (or their
beneficiaries) thereunder.
(e) Parent shall take, and shall cause the ASARCO Surviving
Corporation and its Subsidiaries and all other affiliates of Parent to take, the
following actions: (i) waive any limitations regarding pre-existing conditions
and eligibility waiting periods under any welfare or other employee benefit plan
maintained by any of them for the benefit of employees of ASARCO or any of its
Subsidiaries immediately prior to the Effective Time (the "ASARCO Employees") or
in which ASARCO Employees participate after the Effective Time, (ii) provide
each ASARCO Employee with credit for any co-payments and deductibles paid prior
to the Effective Time for the calendar year in which the Effective Time occurs,
in satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time, and (iii) for all purposes under all compensation and benefit
plans and policies applicable to ASARCO Employees, treat all service by ASARCO
Employees with ASARCO or any of its Subsidiaries or affiliates before the
Effective Time as service with Parent and its Subsidiaries and affiliates.
(f) As of the Effective Time, Parent shall guarantee the
performance of the employment contracts and ASARCO Employee Benefit Plans in
accordance with their respective terms and the terms of this Agreement.
(g) The parties hereto agree that the transactions
contemplated by this Agreement shall constitute a "change of control" for
purposes of the ASARCO Employee Benefit Plans.
Section 5.6 Filings; Other Action.
(a) Subject to the terms and conditions herein provided,
Parent and ASARCO shall (i) promptly make all filings necessary in connection
with their respective Required Statutory Approvals and (ii) use reasonable best
efforts to cooperate with one another in (y) determining whether any filings are
required to be made with, or consents, permits, authorizations or approvals are
required to be obtained from, any third party or other governmental or
regulatory bodies or authorities of federal, state, local and foreign
jurisdictions in connection with the execution and delivery of this
40
Agreement and the consummation of the transactions contemplated hereby and
thereby and (z) timely making all such filings and timely seeking all such
consents, permits, authorizations or approvals, including such party's Required
Third Party Consents. The parties shall cooperate with one another in connection
with the making of all such filings, including providing copies of all such
documents to the non -filing or non-submitting party and its advisors prior to
filing or otherwise submitting.
(b) (i) Without limiting the generality of the undertakings
of Parent and ASARCO pursuant to Section 5.6(a), Parent agrees to obtain the
expiration or termination of the applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
(which approval has already been obtained), and applicable foreign Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization, restraint of trade or limitation of
competition (collectively, "Antitrust Laws"), which obligation shall be
unconditional and shall be not be qualified by best efforts (regardless of
whether fulfillment of such obligation would have a Material Adverse Effect on
Parent or ASARCO). The existence of the conditions set forth in Sections 6.1(a)
shall not limit or diminish Parent's obligations pursuant to the foregoing
sentence or relieve Parent of any liability or damages that may result from its
breach of its obligations under this Section 5.6(b)(i) (nor limit the
obligations of ASARCO pursuant to the following sentence or relieve ASARCO of
any liability or damages that may result from its breach of obligations under
this Section 5.6(b)(i)). In connection with the foregoing, ASARCO will cooperate
with and assist Parent, and, with respect to matters that are within its power
or control will use its reasonable best efforts to promptly (i) take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable Antitrust Laws to consummate the
transactions contemplated by this Agreement as soon as practicable, including,
without limitation, preparing and filing as promptly as practicable all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents and
(ii) obtain and maintain all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any third
party that are necessary, proper or advisable to consummate the ASARCO Merger
and the other transactions contemplated by this Agreement. At Parent's request,
ASARCO will commit to and implement any divestiture, hold separate or similar
transaction or action with respect to any asset or business of ASARCO, which
commitment and implementation may, at ASARCO's option, be conditioned upon and
effective as of the Effective Time. Subject to applicable Laws relating to the
exchange of information, the Parent and ASARCO shall have the right to review in
advance, and to the extent practicable each will consult with the other on, all
the information relating to their respective Subsidiaries, that appears in any
filing made with, or written materials
41
submitted to, any third party and/or any Governmental Entity in connection with
the ASARCO Merger and the other transactions contemplated by this Agreement.
(ii) In furtherance and not in limitation of the foregoing, and to the
extent that any such action has not heretofore been taken or completed, each of
Parent and ASARCO agrees to (i) make an appropriate filing of a Notification and
Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable and in any event within ten
business days of the date hereof, (ii) supply as promptly as practicable any
additional information and documentary material that may be requested pursuant
to the HSR Act and (iii) complete the review process under the HSR Act to permit
the consummation of the ASARCO Merger including, but not limited to, causing the
expiration of termination of the applicable waiting periods under the HSR Act as
soon as practicable.
Section 5.7 Further Assurances. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each of the
parties to this Agreement shall take all such necessary action.
Section 5.8 Takeover Statute. If any "fair price,"
"moratorium," "control share acquisition" or other form of antitakeover statute
or regulation shall become applicable to the transactions contemplated hereby,
ASARCO and the members of its Board of Directors shall grant such approvals and
take such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated hereby.
Section 5.9 No Solicitation by ASARCO.
(a) ASARCO shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its directors, officers
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its Subsidiaries to, directly
or indirectly through another person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal which constitutes any
ASARCO Takeover Proposal (or reasonably could be expected to lead to a ASARCO
Takeover Proposal) or (ii) participate in any discussions or negotiations
regarding any ASARCO Takeover Proposal; provided, however, that if the Board of
Directors of ASARCO determines in good faith, after consultation with outside
counsel,
42
that it is necessary to do so in order to comply with its fiduciary duties to
ASARCO's shareholders under applicable Law, ASARCO may, in response to an ASARCO
Takeover Proposal which was not solicited by it or which did not otherwise
result from a breach of this Section 5.9(a), and subject to providing prior
written notice of its decision to take such action to Parent (the "ASARCO
Notice") (x) furnish information with respect to ASARCO and its Subsidiaries to
any person making an ASARCO Takeover Proposal pursuant to a customary
confidentiality agreement (as determined by ASARCO after consultation with its
outside counsel) and (y) participate in discussions or negotiations regarding
such ASARCO Takeover Proposal. For purposes of this Agreement, "ASARCO Takeover
Proposal" means any inquiry, proposal or offer (or any improvement, restatement,
amendment, renewal or reiteration thereof) from any person relating to any
direct or indirect acquisition or purchase of a business or shares of any class
of equity securities of ASARCO or any of its Subsidiaries, any tender offer or
exchange offer that if consummated would result in any person beneficially
owning any class of equity securities of ASARCO or any of its Subsidiaries, or
any merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving ASARCO or any of its subsidiaries,
other than the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 5.9,
neither the Board of Directors of ASARCO nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the recommendation by such Board of Directors or such
committee of the ASARCO Merger or this Agreement, (ii) approve or recommend, or
propose publicly to approve or recommend, any ASARCO Takeover Proposal, or (iii)
cause ASARCO to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "ASARCO Acquisition
Agreement") related to any ASARCO Takeover Proposal. Notwithstanding the
foregoing, in the event that the Board of Directors of ASARCO receives an ASARCO
Takeover Proposal and the Board of Directors of ASARCO determines in good faith,
after consultation with outside counsel, that it is necessary to do so in order
to comply with its fiduciary duties to ASARCO's shareholders under applicable
Law, the Board of Directors of ASARCO may (x) take any of the actions described
in clauses (i), (ii) or (iii) above or (y) terminate this Agreement (and
concurrently with or after such termination, if it so chooses, cause ASARCO to
enter into any ASARCO Acquisition Agreement with respect to any ASARCO Takeover
Proposal) but only after the fifth business day following Parent's receipt of
written notice advising Parent that the Board of Directors of ASARCO is prepared
to accept an ASARCO Takeover Proposal, specifying the material terms and
conditions of such ASARCO Takeover Proposal and identifying the person making
such ASARCO Takeover Proposal.
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(c) In addition to the obligations of ASARCO set forth in
paragraphs (a) and (b) of this Section 5.9, ASARCO shall immediately advise
Parent orally and in writing of any request for information or of any ASARCO
Takeover Proposal, the material terms and conditions of such request or ASARCO
Takeover Proposal and the identity of the person making such request or ASARCO
Takeover Proposal. ASARCO will keep Parent reasonably informed of the status and
details (including amendments or proposed amend ments) of any such request or
ASARCO Takeover Proposal.
(d) Nothing contained in this Section 5.9 shall prohibit
ASARCO from taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to ASARCO's shareholders if, in the good faith judgement of the Board of
Directors of ASARCO, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable Law. At the
meeting of the ASARCO Board at which this Agreement was considered, authorized
and approved, held October 5, 1999, the ASARCO Board unanimously declared it
advisable that ASARCO's shareholders adopt and approve this Agreement.
Notwithstanding any subsequent determination by the ASARCO Board to change such
recommendation, this Agreement shall be submitted to the shareholders of ASARCO
at the ASARCO Shareholder Meeting for the purpose of obtaining the ASARCO
Shareholder Approval and nothing contained herein shall be deemed to relieve
ASARCO of such obligation.
Section 5.10 Public Announcements. Parent and ASARCO will
consult with and provide each other the reasonable opportunity to review and
comment upon any press release prior to the issuance of any press release
relating to this Agreement or the transactions contemplated herein and shall not
issue any such press release prior to such consultation except as may be
required by Law or by obligations pursuant to any listing agreement with any
national securities exchange.
Section 5.11 Indemnification and Insurance.
(a) Parent agrees that all rights to exculpation and
indemnification for acts or omissions occurring prior to the Effective Time now
existing in favor of the current or former directors or officers (the "ASARCO
Indemnified Parties") of ASARCO as provided in its charter or by-laws or in any
agreement shall survive the ASARCO Merger and shall continue in full force and
effect in accordance with their terms. For six years from the Effective Time,
Parent shall indemnify the ASARCO Indemnified Parties to the same extent as such
ASARCO Indemnified Parties are entitled to indemnification pursuant to the
preceding sentence.
44
(b) For three years from the Effective Time, Parent shall
maintain in effect ASARCO's current directors' and officers' liability insurance
policy (the "ASARCO Policy"), covering those persons who are covered by the
ASARCO Policy (a copy of which has been heretofore delivered to Parent);
provided, however, that in no event shall Parent be required to expend in any
one year an amount in excess of 150% of the annual premiums to be paid by ASARCO
for such insurance, and, provided, further, that if the annual premiums of such
insurance coverage exceed such amount, Parent shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount; and provided, further, that Parent may meet its obligations under this
paragraph by covering the above people under Parent's insurance policy or
policies on the terms described above.
Section 5.12 Accountants' "Comfort" Letters. Parent and
ASARCO will each use reasonable best efforts to cause to be delivered to each
other two letters from their respective independent accountants, one dated a
date within two business days before the date of the Registration Statement and
one dated a date within two business days before the Effective Time, in form and
substance reasonably satisfactory to the recipient and customary in scope for
comfort letters delivered by independent accountants in connection with
registration statements similar to the Registration Statement.
Section 5.13 Additional Reports. Parent and ASARCO shall each
furnish to the other copies of any reports of the type referred to in Section
4.5 which it files with the SEC on or after the date hereof, and each of Parent
and ASARCO, as the case may be, represents and warrants that as of the
respective dates thereof, such reports will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statement therein, in light of the circumstances under
which they were made, not misleading. Any unaudited consolidated interim
financial statements included in such reports (including any related notes and
schedules) will fairly present the financial position of Parent and its
consolidated Subsidiaries or ASARCO and its consolidated Subsidiaries, as the
case may be, as of the dates thereof and the results of operations and changes
in financial position or other information included therein for the periods or
as of the date then ended (subject, where appropriate, to normal year-end
adjustments), in each case in accordance with past practice and GAAP
consistently applied during the periods involved (except as otherwise disclosed
in the notes thereto).
Section 5.14 Disclosure Schedule Supplements. From time to
time after the date of this Agreement and prior to the Effective Time, Parent
will promptly
45
supplement or amend the Parent Disclosure Schedule with respect to any matter
hereafter arising which, if existing or occurring at or prior to the date of
this Agreement, would have been required to be set forth or described in the
Parent Disclosure Schedule or which is necessary to correct any information in a
schedule or in any representation and warranty of Parent which has been rendered
inaccurate thereby. From time to time after the date of this Agreement and prior
to the Effective Time, ASARCO will promptly supplement or amend the ASARCO
Disclosure Schedule with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have been
required to be set forth or described in the ASARCO Disclosure Schedule or which
is necessary to correct any information in a schedule or in any representation
and warranty of ASARCO which has been rendered inaccurate thereby.
Section 5.15 Certain Litigation. Each of the parties shall
prior to or at the Effective Time cease, terminate and dismiss, with prejudice,
any and all actions, proceedings or lawsuits initiated, commenced or filed by
such party in connection with (i) the Combination and (ii) Parent's exchange
offer dated as of September 3, 1999, as amended, for ASARCO and each of the
parties shall use their reasonable best efforts to cause any and all actions,
proceedings or lawsuits initiated, commenced or filed by third parties in
connection with the transactions in the above (i) and (ii) to cease, terminate
or be dismissed, with prejudice.
Section 5.16 Shareholder Litigation. Each of Parent and
ASARCO shall give the other the reasonable opportunity to participate in the
defense of any shareholder litigation against ASARCO or Parent, as applicable,
and its directors relating to the transactions contemplated by this Agreement.
Section 5.17 Section 16(b). Parent and ASARCO shall take all
steps reasonably necessary to cause the transactions contemplated hereby and any
other dispositions of equity securities of ASARCO (including derivative
securities) or acquisitions of Parent equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of ASARCO to be exempt under Rule 16b-3 promulgated under
the Exchange Act.
Section 5.18 Change of Control Agreements.
ASARCO has change of control employment agreements with the
12 people listed in Section 5.18(a) of the ASARCO Disclosure Schedule which
provide certain benefits upon a termination of employment other than for "cause"
or for "good reason" following the Effective Time. Parent shall take all
appropriate steps necessary
46
to, and will, give reasonable advance notice of its intention to offer
employment (including the proposed terms thereof), or not to offer employment,
to each of the aforementioned 12 people and will make such offers in the former
case, all sufficiently in advance of the Effective Time to afford such offerees
reasonable time prior to the Effective Time to decide whether or not to accept
the employment offered prior to the Effective Time. ASARCO has previously made
written disclosure to Parent for each of such 12 people and for all such people
in the aggregate of the total estimated amount payable to such people for all
obligations owed to them by ASARCO under all contractual and plan arrangements
with such people, assuming that the employment of each such person was
terminated effective as of December 31, 1999 (except that specific benefits are
calculated as of specified dates set forth in the written disclosure). The
parties hereto agree that the transactions contemplated by the Agreement shall
constitute a "change of control" for purposes of the change of control
employment agreements referred to in this Section 5.18.
ARTICLE VI
CONDITIONS TO THE ASARCO MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect
the ASARCO Merger. The respective obligations of each party to effect the ASARCO
Merger shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
(a) The Parent Shareholder Approval and the ASARCO
Shareholder Approval shall have been obtained, all in accordance with applicable
Law.
(b) No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or enforced
by any court or other tribunal or governmental body or authority which prohibits
or makes illegal the consummation of the ASARCO Merger substantially on the
terms contemplated hereby. In the event any order, decree or injunction shall
have been issued, each party shall use its reasonable efforts to remove any such
order, decree or injunction.
(c) SubA shall have accepted for exchange all shares of
ASARCO Common Stock validly tendered and not withdrawn pursuant to the ASARCO
Offer; provided, however, that this condition shall not be applicable to the
obligations of SubA if, in breach of this Agreement, SubA fails to accept for
exchange and exchange any such shares validly tendered and not withdrawn
pursuant to the ASARCO Offer.
47
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.1 Termination or Abandonment. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after any
approval of the matters presented in connection with the ASARCO Merger by the
respective shareholders of Parent and ASARCO:
(a) by the mutual consent of the Board of Directors of Parent
and ASARCO;
(b) by either Parent or ASARCO if, without fault of such
terminating party, the purchase of ASARCO Common Stock pursuant to the ASARCO
Offer shall not have occurred on or before March 31, 2000, which date may be
extended by mutual written consent of the parties hereto; or
(c) by either Parent or ASARCO if any court of competent
jurisdiction or other governmental body shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of ASARCO Common
Stock pursuant to the ASARCO Offer or the ASARCO Merger, and such order, decree,
ruling or other action shall have become final and nonappealable; provided that
the party seeking to terminate this Agreement shall have used its reasonable
best efforts, subject to Section 5.6, to remove or lift such order, decree or
ruling; or any statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any court, administrative
agency or commission or other governmental authority or instrumentality which
prohibits or makes illegal the consummation of the ASARCO Offer or the ASARCO
Merger and which, in the case of any such order, injunction or decree, shall
have become final and nonappealable; or there shall have been a failure to
obtain any required consent or approval under foreign laws or regulations which
would prohibit or make the consummation of the ASARCO Offer or the ASARCO Merger
illegal or would have a Material Adverse Effect on Parent or on ASARCO.
Section 7.2 Termination by Parent. This Agreement may be
terminated and the ASARCO Offer and the ASARCO Merger may be abandoned by action
of the Board of Directors of Parent, at any time prior to the purchase of ASARCO
Common Stock pursuant to the ASARCO Offer, if (a) the ASARCO Board shall
withdraw, modify or change its recommendation or approval in respect of this
Agreement or the ASARCO Offer in a manner adverse to Parent, (b) the ASARCO
Board shall have recommended any proposal other than by Parent in respect of an
ASARCO Takeover Proposal, (c) an ASARCO Takeover Proposal other than by Parent
shall be publicly disclosed and at the scheduled expiration of the ASARCO Offer
the Minimum Tender Condition shall not have been satisfied; provided, that all
other conditions to the ASARCO Offer are satisfied, or (d) the condition to the
ASARCO Offer described in clause (e) of Annex A hereto shall not have been
satisfied within 30 days of notice that such condition has not been satisfied.
Section 7.3 Termination by ASARCO. This Agreement may be
terminated and the ASARCO Merger may be abandoned by action of the ASARCO Board,
at any time prior to the acceptance for payment of shares under the ASARCO
Offer, (a) if there shall be a material breach of any of Parent's
representations, warranties or covenants hereunder, which breach shall not be
cured within ten days of notice thereof, or (b) provided ASARCO is not in breach
of any obligation under this Agreement, to allow ASARCO to enter into an
agreement in respect of an ASARCO Takeover Proposal (provided that such
termination pursuant to this clause (b) shall not be effective unless and until
ASARCO shall have paid to Parent the fee described in Section 7.5 hereof and
shall have complied with Section 5.9(c) and the notice provisions of Section
5.9(b)).
Section 7.4 Effect of Termination. In the event of
termination of this Agreement pursuant to Section 7.1, all rights and
obligations under this Agreement shall terminate (except for the provisions of
Sections 5.2(b) and 8.2), and there shall be no other liability on the part of
Parent or ASARCO to the other except liability arising out of a willful and
material breach of this Agreement.
Section 7.5 Termination Fee. In the event that (i) after the
date hereof and prior to the ASARCO Shareholder Meeting an ASARCO Takeover
Proposal shall have been made known to ASARCO or any of its Subsidiaries or
shall have been made directly to its shareholders generally or any person shall
have publicly announced an intention (whether or not conditional) to make an
ASARCO Takeover Proposal and thereafter this Agreement is terminated by either
Parent or ASARCO pursuant to Section 7.1(b) or (ii) this Agreement is terminated
by ASARCO pursuant to Section 7.3(b), then ASARCO shall promptly pay Parent a
fee equal to $30 million (the "ASARCO Termination Fee"), payable by wire
transfer of same day funds; provided, however, that no ASARCO Termination Fee
shall be payable to Parent pursuant to this paragraph unless and until within 18
months of such termination ASARCO or any of its Subsidiaries enters into any
ASARCO Acquisition Agreement or consummates any ASARCO Takeover Proposal (for
the purposes of the foregoing proviso the terms
48
"ASARCO Acquisition Agreement" and "ASARCO Takeover Proposal" shall have the
meanings assigned to such terms in Section 5.9 (except that the reference to the
"acquisition or purchase of a business or shares of any class of equity
securities of ASARCO or any of its Subsidiaries" in the definition of "ASARCO
Takeover Proposal" in Section 5.9 shall be deemed to be a reference to the
"acquisition or purchase of a business that constitutes 20% or more of the net
revenues, net income or the assets of ASARCO and its Subsidiaries, taken as a
whole, or 20% of any class of equity securities of ASARCO or any of its
Subsidiaries," in which event the Termination Fee shall be payable upon the
first to occur of such events. ASARCO acknowledges that the agreements contained
in this Section 7.5(a) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter into
this Agreement; accordingly, if ASARCO fails promptly to pay the ASARCO
Termination Fee, and, in order to obtain such payment, Parent commences a suit
which results in a judgement against ASARCO for the ASARCO Termination Fee,
ASARCO shall pay to Parent its costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the amount of
the ASARCO Termination Fee and the prime rate of Citibank N.A. in effect on the
date such payment was required to be made.
Section 7.6 Amendment or Supplement. At any time before or
after approval of the matters presented in connection with the Combination by
the respective shareholders of Parent and ASARCO and prior to the Effective
Time, this Agreement may be amended or supplemented in writing by Parent and
ASARCO with respect to any of the terms contained in this Agreement; provided,
however, that following approval by the shareholders of ASARCO there shall be no
amendment or change to the provisions hereof with respect to the ASARCO Merger
Consideration as provided herein nor any amendment or change not permitted under
applicable Law, without further approval by the shareholders of ASARCO.
Section 7.7 Extension of Time, Waiver, Etc. At any time prior
to the Effective Time, any party may:
(a) extend the time for the performance of any of the
obligations or acts of the other party;
(b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto; or
(c) subject to the proviso of Section 7.3 waive compliance
with any of the agreements or conditions of the other party contained herein.
49
Notwithstanding the foregoing no failure or delay by any party in exercising any
right hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the ASARCO Merger.
Section 8.2 Expenses. Whether or not the ASARCO Merger is
consummated, all costs and expenses incurred in connection with the ASARCO
Merger, this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except that (a)(i) the filing fee in
connection with any HSR Act filing or any other Required Statutory Approval,
(ii) the commissions and other out-of-pocket transaction costs, including the
expenses and compensation of the Exchange Agent, incurred in connection with the
sale of Excess Shares, (iii) the expenses incurred in connection with the
printing and mailing of the Joint Proxy Statement (including SEC filing fees),
and (iv) all transfer Taxes, shall be shared equally by Parent and ASARCO.
Section 8.3 Counterparts; Effectiveness. This Agreement may
be executed in two or more consecutive counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered (by telecopy or otherwise)
to the other parties.
Section 8.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to the principles of conflicts of laws thereof, except to the extent the
provisions of this Agreement are expressly governed by or derive their authority
from the NJBCA.
Section 8.5 Notices. All notices and other communications
hereunder shall be in writing (including telecopy or similar writing) and shall
be effective (a) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified
50
in this Section 8.5 and the appropriate telecopy confirmation is received or (b)
if given by any other means, when delivered at the address specified in this
Section 8.5:
To Parent or SubA:
Xxxxxx Dodge Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
copies to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
To ASARCO:
ASARCO Incorporated
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxxx Xxxxxx
Xxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
51
Section 8.6 Assignment; Binding Effect. 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. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
Section 8.7 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
Section 8.8 Enforcement of Agreement. The parties hereto
agree that money damages or other remedy at law would not be sufficient or
adequate remedy for any breach or violation of, or a default under, this
Agreement by them and that in addition to all other remedies available to them,
each of them shall be entitled to the fullest extent permitted by Law to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without
limitation, specific performance, without bond or other security being required.
Section 8.9 Entire Agreement; Third-Party Beneficiaries. This
Agreement and the Confidentiality Agreement constitute the entire agreement, and
supersede all other prior agreements and understandings, both written and oral,
between the parties, or any of them, with respect to the subject matter hereof
and thereof and, except for the provisions of Section 5.11 hereof, is not
intended to and shall not confer upon any person other than the parties hereto
any rights or remedies hereunder.
Section 8.10 Headings. Headings of the Articles and Sections
of this Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
Section 8.11 Definitions. References in this Agreement to
"Subsidiaries" of any person shall mean any corporation or other form of legal
entity of which more than 50% of the outstanding voting securities are on the
date hereof directly or indirectly owned by such person. References in this
Agreement to "Significant Subsidiaries" shall mean Subsidiaries which constitute
"significant subsidiaries" under
52
Rule 405 promulgated by the SEC under the Securities Act. References in this
Agreement (except as specifically otherwise defined) to "affiliates" shall mean,
as to any person, any other person which, directly or indirectly, controls, or
is controlled by, or is under common control with, such person. As used in this
definition, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies of a person, whether through the ownership of securities or partnership
of other ownership interests, by contract or otherwise. References in the
Agreement to "person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including, without
limitation, a governmental body or authority. Notwithstanding the foregoing,
Parent shall not be deemed to be an "affiliate" or a "Subsidiary" of ASARCO.
Section 8.12 Finders or Brokers. Except for Xxxxxx Xxxxxxx &
Co. Incorporated with respect to Parent, a copy of whose engagement agreement
has been or will be provided to ASARCO, and Credit Suisse First Boston
Corporation with respect to ASARCO, a copy of whose engagement agreement has
been or will be provided to Parent, neither Parent nor ASARCO nor any of their
respective Subsidiaries has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to any fee or any commission in connection with or upon consummation
of the ASARCO Merger.
53
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
XXXXXX DODGE CORPORATION
By: /s/ X. X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman & CEO
AAV ACQUISITION CORP.
By: /s/ X. X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
ASARCO INCORPORATED
By: /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------
Name: Xxxxxxx X. XxXxxxxxxx
Title: Chairman and Chief Executive
Officer
ANNEX A
Conditions to the ASARCO Offer
Notwithstanding any other provision of the ASARCO Offer,
Parent and the Purchaser shall not be required to accept for exchange or
exchange any ASARCO Common Stock, may postpone the acceptance for exchange of or
exchange for tendered ASARCO Common Stock, and, subject to the terms of the
Merger Agreement, may, terminate or amend the Offer as to any ASARCO Common
Stock not then exchanged (a) if at the Expiration Date, any of the Minimum
Condition or the Xxxxxx Dodge Stockholder Approval Condition (as defined in the
Prospectus dated September 22, 1999 relating to the Offer by Xxxxxx Dodge for
shares of ASARCO Common Stock) has not been satisfied or (b) if on or after
October 5, 1999 and at or prior to the Expiration Date, any of our other
conditions are not satisfied. The conditions are as follows:
(a) The shares of our common stock which shall be issued to
ASARCO stockholders in the ASARCO Offer and the ASARCO Merger have been
authorized for listing on the NYSE, subject to official notice of issuance;
(b) Registration Statement No. 333-86063 and any
post-effective amendments thereto shall be effective under the Securities Act,
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued nor shall there have been proceedings for that purpose
initiated or threatened by the SEC and we shall have received all necessary
state securities law or "blue sky" authorizations;
(c) No temporary restraining order, preliminary or permanent
injunction or other order or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Offer or any of the other transactions contemplated by the Prospectus
dated September 22, 1999 (the "Prospectus") shall be in effect; no statute,
rule, regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any court, administrative agency or commission or
other governmental authority or instrumentality which prohibits, or makes
illegal the consummation of our Offer; nor shall there have been a failure to
obtain any required consent or approval under foreign laws or regulations which
prohibit or would make the consummation of the ASARCO Offer illegal or would
have a Material Adverse Effect on Parent or on ASARCO;
(d) There shall not have been after the date of this
Agreement any (i) amendment of the Code, (ii) amendment or adoption of final or
temporary Treasury Regulations under the Code, (iii) Internal Revenue Service
revenue ruling, revenue procedures, technical advice memorandum or notices, or
(iv) final decision of a court of competent jurisdiction, in each case that
would be inconsistent with the ASARCO Merger qualifying as a reorganization
under Section 368(a) of the Code; and
A-1
(e) The representations and warranties of ASARCO in this
Agreement shall be true and correct (without giving effect to any qualification
as to "materiality" or "Material Adverse Effect" set forth therein) as of the
date of the Agreement and as of the expiration date as though made on and as of
the date of the Agreement and the Expiration Date except where the failure of
such representations and warranties to be so true and correct would not
reasonably be expected to have, individually or in the aggregate a Material
Adverse Effect on ASARCO; and ASARCO shall have performed or complied in all
material respects with all the material agreements and covenants required by
this Agreement.
The foregoing conditions are solely for benefit of Parent and
the Purchaser and Parent and the Purchaser may assert them regardless of the
circumstances giving rise to any such conditions (including any action or
inaction by Parent and the Purchaser). The determination as to whether any
condition has been satisfied shall be deemed a continuing right which may be
asserted at any time and from time to time. Notwithstanding the fact that Parent
and the Purchaser reserve the right to assert the failure of a condition
following acceptance for exchange but prior to exchange in order to delay
exchange or cancel its obligation to exchange properly tendered ASARCO Common
Stock, Parent and the Purchaser will either promptly exchange such ASARCO Common
Stock or promptly return such ASARCO Common Stock.
A-2
