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[EXECUTION COPY]
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BT INDUSTRIES AB,
LIFT ACQUISITION COMPANY, INC.
AND
THE XXXXXXX CORPORATION
Dated as of June 16, 1997
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
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ARTICLE I THE OFFER............................................................. 1
1.01 The Offer..................................................................... 1
1.02 Company Actions............................................................... 3
1.03 Composition of the Board of Directors......................................... 4
ARTICLE II THE MERGER AND RELATED MATTERS........................................ 5
2.01 The Merger.................................................................... 5
2.02 Conversion of Stock........................................................... 6
2.03 Dissenting Stock.............................................................. 6
2.04 Surrender of Certificates..................................................... 7
2.05 Payment ...................................................................... 8
2.06 No Further Rights of Transfers................................................ 8
2.07 Stock Option and Other Plans.................................................. 9
2.08 Certificate of Incorporation of the Surviving Corporation..................... 10
2.09 By-Laws of the Surviving Corporation.......................................... 10
2.10 Directors and Officers of the Surviving Corporation........................... 10
2.11 Closing ...................................................................... 10
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................ 10
3.01 Representations and Warranties of the Company................................. 10
(a) Due Organization, Good Standing and Corporate Power.............. 11
(b) Authorization and Validity of Agreement.......................... 11
(c) Capitalization................................................... 12
(d) Consents and Approvals; No Violations............................ 13
(e) Company Reports and Financial Statements......................... 14
(f) Absence of Certain Changes....................................... 14
(g) Title to Properties; Encumbrances................................ 15
(h) Compliance with Laws............................................. 15
(i) Litigation....................................................... 15
(j) Employee Benefit Plans........................................... 16
(k) Employment Relations and Agreements.............................. 18
(l) Taxes ....................................................... 18
(m) Liabilities...................................................... 20
(i)
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(n) Intellectual Properties.......................................... 20
(o) Proxy Statement, Schedule l4D-9 and Schedule l4D-1............... 22
(p) Broker's or Finder's Fee......................................... 22
(q) Environmental Laws and Regulations............................... 23
(r) State Takeover Statutes; Charter Provisions...................... 24
(s) Voting Requirements.............................................. 24
(t) Rights Agreement................................................. 24
(u) Opinion of Financial Advisor..................................... 25
3.02 Representations and Warranties of Parent and Sub.............................. 25
(a) Due Organization; Good Standing and Corporate Power.............. 25
(b) Authorization and Validity of Agreement.......................... 25
(c) Consents and Approvals; No Violations............................ 26
(d) Offer Documents, Schedule l4D-9 and Proxy Statement.............. 26
(e) Broker's or Finder's Fee......................................... 27
(f) Financing ....................................................... 27
ARTICLE IV TRANSACTIONS PRIOR TO CLOSING DATE.................................... 27
4.01 Access to Information Concerning Properties and Records....................... 27
4.02 Confidentiality............................................................... 28
4.03 Conduct of the Business of the Company Pending the Closing Date............... 28
4.04 Proxy Statement............................................................... 30
4.05 Shareholder Approval.......................................................... 30
4.06 Reasonable Best Efforts....................................................... 31
4.07 No Solicitation of Other Offers............................................... 31
4.09 HSR Act ...................................................................... 33
4.10 Exon-Xxxxxx................................................................... 35
4.11 Employee Benefits............................................................. 35
4.13 Rights Agreement.............................................................. 37
4.14. Public Announcements......................................................... 37
4.15 Transfer Tax.................................................................. 37
ARTICLE V CONDITIONS PRECEDENT TO MERGER........................................ 38
5.01 Conditions Precedent to Obligations of Parent, Sub and the Company............ 38
(a) Approval of Company's Shareholders............................... 38
(b) HSR Act ....................................................... 38
(c) Exon-Xxxxxx...................................................... 38
(d) Injunction....................................................... 38
(e) Statutes ....................................................... 39
(f) Minimum Condition................................................ 39
ARTICLE VI TERMINATION AND ABANDONMENT........................................... 39
6.01 Termination................................................................... 39
(ii)
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6.02 Effect of Termination......................................................... 41
ARTICLE VII MISCELLANEOUS......................................................... 41
7.01 Fees and Expenses............................................................. 41
7.02 Representations and Warranties................................................ 42
7.03 Extension; Waiver............................................................. 42
7.04 Notices ...................................................................... 42
7.05 Entire Agreement.............................................................. 43
7.06 Binding Effect; Benefit; Assignment........................................... 44
7.07 Amendment and Modification.................................................... 44
7.08 Further Actions............................................................... 44
7.09 Headings...................................................................... 44
7.10 Counterparts.................................................................. 44
7.11 Applicable Law................................................................ 44
7.12 Severability.................................................................. 44
7.13 Certain Definitions........................................................... 45
7.14 Parent Guarantee.............................................................. 45
7.15 Submission to Jurisdiction.................................................... 45
ANNEX A...................................................................................A-1
(iii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 16, 1997 (this
"Agreement"), by and among BT INDUSTRIES, INC., a corporation incorporated under
the laws of Sweden ("Parent"), LIFT ACQUISITION COMPANY, INC., a New York
corporation and a direct or indirect wholly-owned subsidiary of Parent ("Sub"),
and THE XXXXXXX CORPORATION, a New York corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent;
WHEREAS, in contemplation thereof it is proposed that Sub will make a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
common stock, $1.50 par value, of the Company ("Common Stock"), subject to the
terms and conditions of this Agreement, at a price of $33.00 per share net to
the seller in cash (the "Offer Price");
WHEREAS, to complete such acquisition, the respective Boards of
Directors of Parent, Sub and the Company, have approved the merger of the
Company into Sub (the "Merger"), pursuant to and subject to the terms and
conditions of this Agreement; and
WHEREAS, the Directors of the Company have unanimously determined that
each of the Offer and the Merger are fair to, and in the best interests of, the
holders of Common Stock, approved the Offer and the Merger and recommended the
acceptance of the Offer and approval and adoption of this Agreement by the
shareholders of the Company; and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.01 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Article VI hereof and so long as none of the
events set forth in Annex A hereto (the "Tender Offer Conditions") shall have
occurred and are continuing, as promptly as practicable, but in no event later
than the fifth business day after the date of this Agreement, Parent and Sub
shall, and Parent shall cause Sub to, commence the Offer at the Offer Price. The
obligations of Sub to accept for payment and to pay for any shares of
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Common Stock tendered shall be subject only to the Tender Offer Conditions, any
of which may be waived by Parent or Sub in their sole discretion; provided,
however, that Sub shall not waive the Minimum Condition (as defined in Annex A)
without the prior written consent of the Company. The Tender Offer Conditions
are for the sole benefit of Parent and Sub and may be asserted by Parent and Sub
regardless of the circumstances giving rise to any such Tender Offer Conditions
or, except as expressly set forth herein, may be waived by Parent and Sub in
whole or in part. Parent and Sub expressly reserve the right to modify the terms
of the Offer, including without limitation to extend the Offer beyond any
scheduled expiration date; provided; however, without the prior written consent
of the Company, Sub shall not (i) reduce the number of shares of Common Stock to
be purchased in the Offer, (ii) reduce the Offer Price, (iii) modify or add to
the Tender Offer Conditions, (iv) change the form of consideration payable in
the Offer or (v) make any other change in the terms of the Offer which is
materially adverse to the holders of the Common Stock. Upon the terms and
subject to the conditions of the Offer, Sub shall purchase all shares of Common
Stock which are validly tendered on or prior to the expiration of the Offer and
not withdrawn.
(b) As soon as reasonably practicable on the date the Offer is
commenced, Parent and Sub shall file, and Parent shall cause Sub to file, with
the Securities and Exchange Commission (the "Commission") a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1") with respect to the Offer. The Schedule 14D-1
shall contain (included as an exhibit) or shall incorporate by reference an
offer to purchase (the "Offer to Purchase") and a form of the related letter of
transmittal (the "Letter of Transmittal"), as well as all other information and
exhibits required by law (which Schedule 14D-1, Offer to Purchase, Letter of
Transmittal and such other information and exhibits, together with any
supplements or amendments thereto, are referred to herein collectively as the
"Offer Documents"). The Schedule 14D-1 will comply in all material respects with
the provisions of applicable federal securities laws and, on the date filed with
the Commission and the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading, except that no representation is made by Parent or Sub
with respect to any information supplied by the Company in writing for inclusion
in the Schedule 14D-1. Each of Parent and Sub agrees promptly to correct any
information provided by it for use in the Offer Documents that shall be, or have
become, false or misleading in any material respect, and Parent and Sub further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected
to be filed with the Commission and the other Offer Documents as so corrected to
be disseminated to holders of Common Stock, in each case as and to the extent
required by applicable federal securities laws. Each of Parent and Sub agrees to
provide the Company and its counsel with copies of any written comments Parent
and Sub or their counsel may receive from the Commission or its staff with
respect to the Offer Documents promptly
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after the receipt of such comments and shall provide the Company and its counsel
an opportunity to participate, including by participating with Parent and its
counsel in any discussions with the Commission or its staff, in the response of
Parent or Sub to such comments.
1.02 Company Actions. The Company hereby consents to the Offer and the
Merger and represents that (a) its Board of Directors (at a meeting duly called
and held) has (i) determined by the unanimous vote of the Directors that each of
the Offer and the Merger is fair to, and in the best interests of, the holders
of Common Stock, (ii) approved the Offer and the Merger and adopted this
Agreement in accordance with the provisions of the New York Business Corporation
Law, (iii) recommended acceptance of the Offer and approval and adoption of this
Agreement by the shareholders of the Company, (iv) taken all other applicable
action necessary to render (x) Section 912 of the New York Business Corporation
Law and other state takeover statutes, (y) Article SEVENTH of the Company's
Restated and Amended Certificate of Incorporation and (z) the Rights Agreement
dated as of March 1, 1997 (the "Rights Agreement") inapplicable to the Offer and
the Merger; and (b) Xxxxxx Brothers has delivered to the Board of Directors of
the Company its opinion that the consideration to be received by the holders of
Common Stock, other than Parent and Sub, pursuant to the Offer and the Merger is
fair to such holders of Common Stock from a financial point of view, subject to
the assumptions and qualifications contained in such opinion. The Company shall
file with the Commission, as soon as practicable on the date of the commencement
of the Offer, a Solicitation/Recommendation Statement on Schedule 14D-9,
(together with all amendments and supplements thereto, the "Schedule l4D-9"),
containing the recommendations referred to in clause (a) of the preceding
sentence and shall disseminate the Schedule 14D-9 as required by Rule 14d-9
under the Exchange Act. Parent and Sub and their counsel shall be given the
opportunity to review and comment upon the Schedule l4D-9 prior to its filing
with the Commission. The Schedule 14D-9 will comply in all material respects
with the provisions of applicable federal securities laws and, on the date filed
with the Commission and on the date first published, sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent or Sub in
writing for inclusion in the Schedule 14D-9. The Company agrees to provide
Parent and its counsel with any comments the Company or its counsel may receive
from the Commission or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by participating with the Company and its
counsel in any discussions with the Commission or its staff, in the response of
the Company to such comments. In connection with the Offer, the Company will
promptly furnish Sub with mailing labels, security position listings and any
available listing or computer list containing the names and
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addresses of the record holders of the Common Stock as of the most recent
practicable date and shall furnish Sub with such additional information
(including, but not limited to, updated lists of holders of Common Stock and
their addresses, mailing labels and lists of security positions) and such other
assistance as Sub or its agents may reasonably request in communicating the
Offer to the Company's shareholders. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger, Parent and
its affiliates and associates shall hold in confidence the information contained
in any such labels, listings and files, will use such information only in
connection with the Offer and the Merger, and, if this Agreement is terminated,
shall deliver to the Company all copies of such information in their possession.
The Company has been advised that each of its directors and executive officers
intends to tender pursuant to the Offer all shares of Common Stock owned of
record and beneficially by him or her except to the extent such tender would
violate applicable securities laws.
1.03 Composition of the Board of Directors. (a) Promptly upon the
acceptance for payment of, and payment by Sub in accordance with the Offer for,
shares of Common Stock equal to at least two-thirds of the outstanding shares of
Common Stock, pursuant to the Offer, Sub shall be entitled to designate up to
such number of directors on the Board of Directors of the Company, rounded up to
the next whole number, as will give Sub, subject to compliance with Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation
on such Board of Directors equal to at least that number of directors which
equals the product of the total number of directors on the Board of Directors
(giving effect to the directors elected pursuant to this sentence) multiplied by
a fraction, the numerator of which shall be the number of shares of Common Stock
beneficially owned by Sub and Parent and the denominator of which shall be the
number of shares of Common Stock then outstanding, and the Company and its Board
of Directors shall, at such time, take any and all such action needed to cause
Sub's designees to be appointed to the Company's Board of Directors (including
using its reasonable best efforts to cause directors to resign). Subject to
applicable law, the Company shall take all action requested by Parent which is
reasonably necessary to effect any such election, including mailing to its
shareholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the Schedule 14D-9 so
long as Sub shall have provided to the Company on a timely basis all information
required to be included in the Information Statement with respect to Sub's
designees. Parent or Sub will be solely responsible for any information with
respect to either of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1. In furtherance thereof, the Company
will increase the size of the Company's Board of Directors (subject to the
limitations set forth in the Company's Restated and Amended Certificate of
Incorporation and By-Laws), or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Sub's designees to
be elected to the Company's
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Board of Directors. At the Effective Time (as defined in Section 2.01(a)
hereof), the Company, if so requested, will use its reasonable efforts to cause
persons designated by Sub to constitute the same percentage of each committee of
such board, each board of directors of each Subsidiary and each committee of
each such board (in each case to the extent of the Company's ability to elect
such persons).
(b) Following the election or appointment of Sub's designees pursuant
to this Section 1.03 and prior to the Effective Time (as hereinafter defined),
any amendment or termination of this Agreement or the Restated and Amended
Certificate of Incorporation or By-Laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent and Sub or waiver
of any of the Company's rights hereunder, and any other consent or action by the
Board of Directors hereunder, will require the concurrence of a majority (which
shall be at least two) of the directors of the Company then in office who are
directors on the date hereof and who voted to approve this Agreement or are
designated by a majority of the directors of the Company who are directors on
the date hereof and who voted to approve this Agreement.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. (a) Subject to the terms and conditions of this
Agreement, at the time of the Closing (as defined in Section 2.11 hereof), a
certificate of merger (the "Certificate of Merger") shall be duly prepared,
executed and acknowledged by Sub and the Company in accordance with the New York
Business Corporation Law and shall be filed on the Closing Date (as defined in
Section 2.11 hereof). The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of New York in
accordance with the provisions and requirements of the New York Business
Corporation Law. The date and time when the Merger shall become effective is
hereinafter referred to as the "Effective Time."
(b) At the Effective Time, Sub shall be merged with and into the
Company and the separate corporate existence of Sub shall cease, and the Company
shall continue as the surviving corporation under the laws of the State of New
York under the name of "The Xxxxxxx Corporation" (the "Surviving Corporation").
(c) From and after the Effective Time, the Merger shall have the
effects set forth in the applicable provisions of the New York Business
Corporation Law.
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2.02 Conversion of Stock. At the Effective Time:
(a) Each share of Common Stock then issued and outstanding (other than
(i) any shares of Common Stock which are held by any Subsidiary or in the
treasury of the Company, or which are held, directly or indirectly, by
Parent or any direct or indirect subsidiary of Parent (including Sub), all
of which shall be cancelled and none of which shall receive any payment
with respect thereto and (ii) shares of Common Stock held by Dissenting
Shareholders (as defined in Section 2.03 hereof)) shall, by virtue of the
Merger and without any action on the part of Parent, Sub, the Company or
the holder thereof, be cancelled and converted into and represent the right
to receive an amount in cash, without interest, equal to the price paid for
each share of Common Stock pursuant to the Offer (the "Merger
Consideration"); and
(b) Each share of common stock, par value $0.01 per share, of Sub then
issued and outstanding shall, by virtue of the Merger and without any
action on the part of Parent, Sub, the Company or the holder thereof,
become one fully paid and nonassessable share of common stock, par value
$0.01 per share, of the Surviving Corporation.
2.03 Dissenting Stock. Notwithstanding anything in this Agreement to
the contrary but only to the extent required by New York Business Corporation
Law, shares of Common Stock that are issued and outstanding immediately prior to
the Effective Time and are held by holders of Common Stock who comply with all
the provisions of New York law concerning the right of holders of Common Stock
to dissent from the Merger and require appraisal of their shares of Common Stock
("Dissenting Shareholders") shall not be converted into the right to receive the
Merger Consideration but shall become the right to receive such consideration as
may be determined to be due such Dissenting Shareholder pursuant to the law of
the State of New York; provided, however, that (i) if any Dissenting Shareholder
shall subsequently deliver a written withdrawal of his or her demand for
appraisal (with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within 60 days after the Effective Time), or (ii) if
any Dissenting Shareholder fails to establish and perfect his or her entitlement
to appraisal rights as provided by applicable law, then such Dissenting
Shareholder or Shareholders, as the case may be, shall forfeit the right to
appraisal of such shares and such shares shall thereupon be cancelled and be
deemed to have been converted into the right to receive, as of the Effective
Time, the Merger Consideration, without interest. The Company shall give Parent
and Sub (A) prompt notice of any written demands for appraisal, withdrawals of
demands for appraisal and any other related instruments received by the Company,
and (B) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal. The Company will not, except with the prior written
consent of Parent,
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voluntarily make any payment with respect to any demands for appraisal or settle
or offer to settle any such demand.
2.04 Surrender of Certificates. (a) Prior to the Effective Time, Parent
shall designate a bank or trust company located in the United States to act as
paying agent (the "Paying Agent") for purposes of making the cash payments
contemplated hereby. As soon as practicable after the Effective Time, Parent
shall cause the Paying Agent to mail and/or make available to each holder of a
certificate theretofore evidencing shares of Common Stock (other than those
which are held by any Subsidiary or in the treasury of the Company or which are
held directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Sub)) a notice and letter of transmittal advising such holder
of the effectiveness of the Merger and the procedure for surrendering to the
Paying Agent such certificate or certificates which immediately prior to the
Effective Time represented outstanding Common Stock (the "Certificates") in
exchange for the Merger Consideration deliverable in respect thereof pursuant to
this Article II. Upon the surrender for cancellation to the Paying Agent of such
Certificates, together with a letter of transmittal, duly executed and completed
in accordance with the instructions thereon, and any other items specified by
the letter of transmittal, the Paying Agent shall promptly pay to the Person (as
defined in Section 7.14 hereof) entitled thereto the Merger Consideration
deliverable in respect thereof. Until so surrendered, each Certificate shall be
deemed, for all corporate purposes, to evidence only the right to receive upon
such surrender the Merger Consideration deliverable in respect thereof to which
such Person is entitled pursuant to this Article II. No interest shall be paid
or accrued in respect of such cash payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article II,
provided that, the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory
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to it against any claim that may be made against the Surviving Corporation with
respect to the Certificate claimed to have been lost, stolen or destroyed.
2.05 Payment. Concurrently with or immediately prior to the Effective
Time, Parent or Sub shall deposit in trust with the Paying Agent cash in United
States dollars in an aggregate amount equal to the product of (i) the number of
shares of Common Stock outstanding immediately prior to the Effective Time
(other than shares of Common Stock which are held by any Subsidiary or in the
treasury of the Company or which are held directly or indirectly by Parent or
any direct or indirect subsidiary of Parent (including Sub) or a Person known at
the time of such deposit to be a Dissenting Shareholder) and (ii) the Merger
Consideration (such amount being hereinafter referred to as the "Payment Fund").
The Payment Fund shall be invested by the Paying Agent as directed by Parent in
direct obligations of the United States, obligations for which the full faith
and credit of the United States is pledged to provide for the payment of
principal and interest, commercial paper rated of the highest quality by Xxxxx'x
Investors Services, Inc. or Standard & Poor's Ratings Group or certificates of
deposit, bank repurchase agreements or bankers' acceptances of a commercial bank
having at least $100,000,000 in assets (collectively "Permitted Investments") or
in money market funds which are invested in Permitted Investments, and any net
earnings with respect thereto shall be paid to Parent as and when requested by
Parent. The Paying Agent shall, pursuant to irrevocable instructions, make the
payments referred to in Section 2.02(a) hereof out of the Payment Fund. The
Payment Fund shall not be used for any other purpose except as otherwise agreed
to by Parent. Promptly following the date which is six months after the
Effective Time, the Paying Agent shall return to the Surviving Corporation all
cash, certificates and other instruments in its possession that constitute any
portion of the Payment Fund (other than net earnings on the Payment Fund which
shall be paid to Parent), and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Merger Consideration, without
interest, but shall have no greater rights against the Surviving Corporation or
Parent than may be accorded to general creditors of the Surviving Corporation or
Parent under applicable law. Notwithstanding the foregoing, neither the Paying
Agent nor any party hereto shall be liable to a holder of shares of Common Stock
for any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
2.06 No Further Rights of Transfers. At and after the Effective Time,
each holder of a Certificate shall cease to have any rights as a shareholder of
the Company, except for, in the case of a holder of a Certificate (other than
shares to be cancelled pursuant to Section 2.02(a) hereof and other than shares
held by Dissenting Shareholders), the right to surrender his or her Certificate
in exchange for payment of the Merger Consideration or, in the case of a
Dissenting Shareholder, to perfect his or her right to receive payment for his
or her shares
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pursuant to New York law if such holder has validly perfected and not withdrawn
his or her right to receive payment for his or her shares, and no transfer of
shares of Common Stock shall be made on the stock transfer books of the
Surviving Corporation. Certificates presented to the Surviving Corporation after
the Effective Time shall be cancelled and exchanged for cash as provided in this
Article II. At the close of business on the day of the Effective Time the stock
ledger of the Company with respect to Common Stock shall be closed.
2.07 Stock Option and Other Plans. (a) Prior to the Effective Time,
each of the Board of Directors of the Company (or, if appropriate, any Committee
thereof) and the Company shall use its reasonable best efforts to obtain the
consent of all of the holders of options to purchase Common Stock (the
"Options") heretofore granted under any stock option plan of the Company (the
"Stock Plans") to provide for the cancellation, effective at the Effective Time,
of all the outstanding Options, as follows: Immediately prior to the Effective
Time, each Option, whether or not then vested or exercisable, shall no longer be
exercisable for the purchase of shares of Common Stock but shall entitle each
holder thereof, in cancellation and settlement therefor, to payments in cash
(subject to any applicable withholding taxes, the "Cash Payment"), at the
Effective Time, equal to the product of (x) the total number of shares of Common
Stock subject to such Option as to which such Option could have been exercisable
and (y) the excess of the Merger Consideration over the exercise price per share
of Common Stock subject to such Option, each such Cash Payment to be paid to
each holder of an outstanding Option at the Effective Time. The Company will use
its reasonable best efforts to ensure that any then-outstanding stock
appreciation rights or limited stock appreciation rights shall be cancelled as
of immediately prior to the Effective Time without any payment therefor. As
provided herein, the Stock Plans and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any Subsidiary (collectively with the Stock
Plans, referred to as the "Stock Incentive Plans") shall terminate as of the
Effective Time. The Company will use its reasonable best efforts to take all
steps necessary to ensure that neither the Company nor any of its Subsidiaries
is or will be bound by any Options, other options, warrants, rights or
agreements which would entitle any Person, other than Parent or its affiliates
(including Sub), to own any capital stock of the Surviving Corporation or except
for certain call options in respect of the capital stock of certain of its
dealership subsidiaries, as more fully set forth in Section 3.01(c)(ii) of the
Company Disclosure Letter, any of its subsidiaries or to receive any payment in
respect thereof. The Company will use its reasonable best efforts to obtain all
necessary consents to ensure that after the Effective Time, the only rights of
the holders of Options to purchase shares of Common Stock in respect of such
Options will be to receive the Cash Payment in cancellation and settlement
thereof.
(b) All Stock Plans shall terminate as of the Effective Time and the
provisions in any other Employee Benefit Plan providing for the issuance,
transfer or grant of
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any capital stock of the Company or any interest in respect of any capital stock
of the Company shall be deleted as of the Effective Time, and the Company shall
use its reasonable best efforts to ensure that following the Effective Time no
holder of an option to purchase Common Stock or any participant in any Stock
Plan shall have any right thereunder to acquire any capital stock of the
Company, Parent or the Surviving Corporation.
2.08 Certificate of Incorporation of the Surviving Corporation. The
Restated and Amended Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation and shall be amended as set forth on
Annex B attached hereto.
2.09 By-Laws of the Surviving Corporation. The By-Laws of the Company,
as in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation.
2.10 Directors and Officers of the Surviving Corporation. At the
Effective Time, the directors of Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, each of such directors to
hold office, subject to the applicable provisions of the Certificate of
Incorporation and By-Laws of the Surviving Corporation, until the next annual
shareholders' meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At the Effective
Time, the officers of the Company immediately prior to the Effective Time shall,
subject to the applicable provisions of the Certificate of Incorporation and
By-Laws of the Surviving Corporation, be the officers of the Surviving
Corporation until their respective successors shall be duly elected or appointed
and qualified.
2.11 Closing. Unless this Agreement shall have been terminated pursuant
to Article VI hereof, and the transactions contemplated thereby shall have been
abandoned, the closing of the Merger (the "Closing") shall take place at the
offices of White & Case, 1155 Avenue of the Americas, New York, New York, as
soon as practicable after the last of the conditions set forth in Article V
hereof is fulfilled or waived (subject to applicable law) but in no event later
than the fifth business day thereafter, or at such other time and place and on
such other date as Parent and the Company shall mutually agree (the "Closing
Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent and Sub as follows:
(a) Due Organization, Good Standing and Corporate Power. Each of the
Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and each such corporation has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and
authority would not have a material adverse effect on the business,
properties, assets, operations, results of operations or financial
condition (the "Condition") of the Company and its Subsidiaries taken as a
whole. Each of the Company and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be so qualified or licensed and in good
standing would not have a material adverse effect on the Condition of the
Company and its Subsidiaries taken as a whole. The Company has made
available to Parent and Sub complete and correct copies of the Restated and
Amended Certificate of Incorporation and By-Laws of the Company and the
comparable governing documents of each of its Subsidiaries, in each case as
amended to the date of this Agreement. Other than as set forth in Section
3.01(a) of the Company's disclosure letter (the "Company Disclosure
Letter") delivered concurrently with the delivery of this Agreement, the
respective certificates of incorporation and by-laws or other
organizational documents of the Subsidiaries of the Company do not contain
any provision limiting or otherwise restricting the ability of the Company
to control such Subsidiaries.
(b) Authorization and Validity of Agreement. The Company has full
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the
Company, and the consummation by it of the transactions contemplated
hereby, have been duly authorized and unanimously approved by its Board of
Directors and no other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby (other than the approval of this Agreement by the
holders of at
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least two thirds of the outstanding shares of Common Stock entitled to vote
and the filing of appropriate merger documents as required by New York
law). This Agreement has been duly executed and delivered by the Company
and is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(c) Capitalization. (i) The authorized capital stock of the Company
consists of 15,000,000 shares of Common Stock and no shares of preferred
stock. As of June 10, 1997, (1) 10,738,604 shares of Common Stock are
issued and outstanding, (2) 148,586 shares of Common Stock are reserved for
issuance pursuant to outstanding Options granted under the Stock Plans and
(3) 20,758 shares of Common Stock are held in the Company's treasury. All
issued and outstanding shares of Common Stock have been validly issued and
are fully paid and nonassessable, and are not subject to, nor were they
issued in violation of, any preemptive rights. Except as set forth in this
Section 3.01(c) or in Section 3.01(c) of the Company Disclosure Letter, (i)
there are no shares of capital stock of the Company authorized, issued or
outstanding and (ii) there are not as of the date hereof, and at the
Effective Time there will not be, any outstanding or authorized options,
warrants, rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to Common Stock or any other shares of
capital stock of the Company, pursuant to which the Company is or may
become obligated to issue shares of Common Stock, any other shares of its
capital stock or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of the capital stock of
the Company. The Company has no authorized or outstanding bonds,
debentures, notes or other indebtedness the holders of which have the right
to vote (or convertible or exchangeable into or exercisable for securities
having the right to vote) with the shareholders of the Company or any of
its Subsidiaries on any matter ("Voting Debt").
(ii) Section 3.01(c)(ii) of the Company Disclosure Letter lists all of
the Company's Subsidiaries. All of the outstanding shares of capital stock
of each of the Company's Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, are not subject to, nor were
they issued in violation of, any preemptive rights, and are owned, of
record and beneficially, by the Company, free and clear of all liens,
encumbrances, options or claims whatsoever, except as set forth in Section
3.01(c)(ii) of the Company Disclosure Letter. Except as set forth in
Section 3.01(c)(ii) of the Company Disclosure Letter, no shares of capital
stock of any of the Company's Subsidiaries are reserved for issuance and
there are no outstanding or authorized
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options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to the capital stock of any
Subsidiary, pursuant to which such Subsidiary is or may become obligated to
issue any shares of capital stock of such Subsidiary or any securities
convertible into, exchangeable for, or evidencing the right to subscribe
for, any shares of such Subsidiary. There are no restrictions of any kind
which prevent the payment of dividends by any of the Company's
Subsidiaries. Except for the Subsidiaries listed on Section 3.01(c)(ii) of
the Company Disclosure Letter, the Company does not own, directly or
indirectly, any capital stock or other equity interest in any Person or
have any direct or indirect equity or ownership interest in any Person and
neither the Company nor any of its Subsidiaries is subject to any
obligation or requirement to provide funds for or to make any investment
(in the form of a loan, capital contribution or otherwise) to or in any
Person. The Company's Subsidiaries have no Voting Debt.
(d) Consents and Approvals; No Violations. Assuming (i) the filings
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), are made and the waiting period thereunder has
been terminated or has expired, (ii) voluntary notification under Section
721 of the Defense Production Act of 1950, as amended ("Exon-Xxxxxx"), is
made, (iii) the requirements of the Exchange Act relating to the Proxy
Statement and the Offer are met, (iv) the filing of the Certificate of
Merger and other appropriate merger documents, if any, as required by New
York Business Corporation Law, are made and (v) approval of the Merger and
this Agreement by holders of at least two thirds of the outstanding shares
of Common Stock entitled to vote, if required by the New York Business
Corporation Law or the Restated and Amended Certificate of Incorporation or
By-Laws of the Company, is received, the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not: (1) violate any provision of the
Restated and Amended Certificate of Incorporation or By-Laws of the Company
or the comparable governing documents of any of its Subsidiaries; (2)
violate any statute, ordinance, rule, regulation, order or decree of any
court or of any governmental or regulatory body, agency or authority
applicable to the Company or any of its Subsidiaries or by which any of
their respective properties or assets may be bound; (3) require any filing
with, or permit, consent or approval of, or the giving of any notice to,
any governmental or regulatory body, agency or authority; or (4) except as
set forth in Section 3.01(d) of the Company Disclosure Letter, result in a
violation or breach of, conflict with, constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation, payment or acceleration) under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company or any of
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its Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement,
lease, franchise agreement or other instrument or obligation to which the
Company or any of its Subsidiaries is a party, or by which it or any of
their respective properties or assets are bound or subject except for in
the case of clauses (3) and (4) above for such filing, permit, consent,
approval or violation, which would not have a material adverse effect on
the Condition of the Company and its Subsidiaries, taken as a whole, or
would prevent or materially delay consummation of the transactions
contemplated by this Agreement.
(e) Company Reports and Financial Statements. (i) Since January 1,
1994, the Company has filed all forms, reports and documents with the
Commission required to be filed by it pursuant to the federal securities
laws and the Commission rules and regulations thereunder, and all forms,
reports and documents filed with the Commission by the Company have
complied in all material respects with all applicable requirements of the
federal securities laws and the Commission rules and regulations
promulgated thereunder. The Company has, prior to the date of this
Agreement, made available to Parent true and complete copies of all forms,
reports, registration statements and other filings filed by the Company
with the Commission since January 1, 1994, (such forms, reports,
registration statements and other filings, together with any exhibits, any
amendments thereto and information incorporated by reference therein, are
sometimes collectively referred to as the "Commission Filings"). As of
their respective dates, the Commission Filings 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. Each of the
consolidated balance sheets as of the end of the fiscal years ended
December 31, 1996, December 31, 1995, and December 31, 1994, and the
consolidated statements of income, consolidated statements of shareholders'
equity and consolidated statements of cash flows for the fiscal years ended
December 31, 1996, December 31, 1995, and December 31, 1994, included in
the Commission Filings, were prepared in accordance with generally accepted
accounting principles (as in effect from time to time) applied on a
consistent basis (except as may be indicated therein or in the notes or
schedules thereto) and present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and changes in cash flows for the periods then ended.
(f) Absence of Certain Changes. Except as previously disclosed in the
Commission Filings, since December 31, 1996, (i) there has not been any
material adverse change in the Condition of the Company and its
Subsidiaries taken as a whole; (ii) the businesses of the Company and each
of its Subsidiaries have been conducted
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only in the ordinary course; (iii) neither the Company nor any of its
Subsidiaries has incurred any material liabilities (direct, contingent or
otherwise) or engaged in any material transaction or entered into any
material agreement outside the ordinary course of business; (iv) the
Company and its Subsidiaries have not increased the compensation of any
officer or granted any general salary or benefits increase to their
employees other than in the ordinary course of business; (v) neither the
Company nor any of its Subsidiaries has taken any action referred to in
Section 4.03 hereof except as permitted thereby; (vi) there has been no
declaration, setting aside or payment of any dividend or other distribution
with respect to the capital stock of the Company; and (vii) there has been
no change by the Company in accounting principles, practices or methods.
(g) Title to Properties; Encumbrances. The Company and each of its
Subsidiaries has good, valid and marketable title to (i) all of its
material tangible properties and assets (real and personal), including,
without limitation, all the properties and assets reflected in the
consolidated balance sheet as of December 31, 1996 except as indicated in
the notes thereto and except for properties and assets reflected in the
consolidated balance sheet as of December 31, 1996 which have been sold or
otherwise disposed of in the ordinary course of business after such date
and except where the failure to have such good, valid and marketable title
would not have a material adverse effect on the Condition of the Company
and its Subsidiaries taken as a whole, and (ii) all the tangible properties
and assets purchased by the Company and any of its Subsidiaries since
December 31, 1996 except for such properties and assets which have been
sold or otherwise disposed of in the ordinary course of business and except
where the failure to have such good, valid and marketable title would not
have a material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole; in each case subject to no encumbrance,
lien, charge or other restriction of any kind or character, except for (1)
liens reflected in the consolidated balance sheet as of December 31, 1996,
(2) liens consisting of zoning or planning restrictions, easements, permits
and other restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially detract from the
value of, or impair the use of, such property by the Company or any of its
Subsidiaries in the operation of its respective business, (3) liens for
current taxes, assessments or governmental charges or levies on property
not yet due and delinquent and (4) such encumbrances, liens, charges or
other restrictions which would not have a material adverse effect on the
Condition of the Company and its Subsidiaries taken as a whole.
(h) Compliance with Laws. Except as disclosed in the Commission
Filings, the Company and its Subsidiaries are in compliance with all
applicable laws, regulations, orders, judgments and decrees except where
the failure to so comply would not have a material adverse effect on the
Condition of the Company and its Subsidiaries
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taken as a whole or would prevent or materially delay consummation of the
transactions contemplated by this Agreement.
(i) Litigation. Except as disclosed in the Commission Filings or as
set forth in Section 3.01(i) of the Company Disclosure Letter, there is no
action, suit, proceeding at law or in equity, or any arbitration or any
administrative or other proceeding by or before (or to the knowledge of the
Company any investigation by) any governmental or other instrumentality or
agency, pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any of its Subsidiaries, or any of their
properties or rights which would have a material adverse effect on the
Condition of the Company and its Subsidiaries taken as a whole or would
prevent or materially delay consummation of the transactions contemplated
by this Agreement. There are no such suits, actions, claims, proceedings or
investigations pending or, to the knowledge of the Company, threatened,
seeking to prevent or challenging the transactions contemplated by this
Agreement. Except as disclosed in the Commission Filings, neither the
Company nor any of its Subsidiaries is subject to any judgment, order or
decree entered in any lawsuit or proceeding which would have a material
adverse effect on the Condition of the Company and its Subsidiaries taken
as a whole or would prevent or materially delay consummation of the
transactions contemplated by this Agreement.
(j) Employee Benefit Plans. Set forth in Section 3.01(j) of the
Company Disclosure Letter is an accurate and complete list of each domestic
and foreign 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 each stock option, stock
appreciation right, restricted stock, incentive, bonus, employment,
severance or salary or benefits continuation plan, program, arrangement or
agreement maintained by the Company or any of its Subsidiaries (including,
for this purpose and for the purpose of all of the representations in this
Section 3.01(j), all employers (whether or not incorporated) that would be
treated together with the Company and/or any of its Subsidiaries as a
single employer within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended, and the rules and regulations thereunder (the
"Code")) or to which the Company or any such Subsidiary contributes (or has
any obligation to contribute), has any liability or is a party
(collectively, the "Employee Benefit Plans"); and, except to the extent
that a breach of any of the following representations would not have a
material adverse effect on the Condition of the Company and its
Subsidiaries, taken as a whole, (i) each Employee Benefit Plan is in
substantial compliance with applicable law (including, without limitation,
ERISA and the Code) and has been administered and operated in all respects
in accordance with its terms; (ii) each Employee Benefit Plan which is
intended to be "qualified" within the meaning of Section 401(a) of the Code
has received a
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favorable determination letter from the Internal Revenue Service, and each
foreign Employee Benefit Plan which is intended to have a similar status
under applicable non-U.S. law has received a determination of such status
from the relevant governmental authority, and, to the knowledge of the
Company, no event has occurred and no condition exists which could
reasonably be expected to result in the revocation of any such
determination; (iii) no complete or partial termination of any Employee
Benefit Plan covered by Title IV of ERISA has occurred and no proceedings
have been instituted to terminate or appoint a trustee to administer any
such Employee Benefit Plan; (iv) neither the Company nor any of its
Subsidiaries has incurred any unsatisfied liability to the Pension Benefit
Guaranty Corporation (the "PBGC") with respect to any "single-employer
plan" (within the meaning of Section 4001(a)(15) of ERISA), including,
without limitation, any liability under Section 4069 of ERISA or any
penalty imposed under Section 4071 of ERISA, except for payments of
premiums to the PBGC; (v) no Employee Benefit Plan subject to Section 412
or 418B of the Code or Section 302 of ERISA has incurred any accumulated
funding deficiency within the meaning of such sections of the Code or
ERISA; (vi) the actuarial present value of the accumulated plan benefits
(whether or not vested and determined in accordance with the actuarial
assumptions which are set forth in the most recent actuarial valuation
report of the applicable plan) under any Employee Benefit Plan covered by
Title IV of ERISA or the benefits of which are actuarially determined, as
of the close of its most recent plan year did not exceed the fair value of
the assets allocable thereto; (vii) full payment has been timely made of
all amounts which the Company or any of its Subsidiaries is required under
applicable law or under any Employee Benefit Plan to have paid as of the
last day of the most recent fiscal year of such Employee Benefit Plan ended
prior to the date hereof, and the Company and its Subsidiaries have made
adequate provisions, in accordance with generally accepted accounting
principles, in their financial statements for all obligations and
liabilities under all Employee Benefit Plans that have accrued but have not
been paid because they are not yet due under the terms of any such Employee
Benefit Plan or applicable law; (viii) no Employee Benefit Plan currently
contributed to by the Company or any of its Subsidiaries is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA, or a
"multiple employer plan" within the meaning of the Code or ERISA and
neither the Company nor any of its Subsidiaries has incurred any
unsatisfied withdrawal liability under Title IV of ERISA with respect to
any such plan; (ix) neither the Company nor any Subsidiary has incurred any
material liability (including, without limitation, additional
contributions, fines, taxes, penalties or loss of tax deduction) as a
result of a failure to administer or operate any Employee Benefit Plan that
is a "group health plan" (as such term is defined in Section 607(1) of
ERISA or Section 5000(b)(1) of the Code) in compliance with the applicable
requirements of Part 6 of Subtitle B of Title I of ERISA or Section 4980B
of the Code; (x) except as set forth in Section 3.01(j)(x) of the Company
Disclosure Letter or the financial
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statements of the Company and its Subsidiaries included in the Commission
Filings, neither the Company nor any of its Subsidiaries has any unfunded
liabilities pursuant to any "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA) that is not intended to be "qualified"
under Section 401(a) of the Code; (xi) none of the Company, any of its
Subsidiaries or affiliates or, to Company's knowledge, any other
"disqualified person" or "party in interest" (as defined in Section
4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has
engaged in any transaction, act or omission to act in connection with any
Employee Benefit Plan that could reasonably be expected to result in the
imposition of a penalty pursuant to Section 502 of ERISA, damages pursuant
to Section 409 of ERISA or a tax pursuant to Section 4975 of the Code;
(xii) set forth in Section 3.01(j)(xii) of the Company Disclosure Letter
are all Employee Benefit Plans and agreements, which (either alone or upon
the occurrence of any additional or subsequent event) will or may result in
any payment, "parachute payment" (as such term is defined in Section 280G
of the Code), severance, bonus, retirement or job security or similar-type
benefit, or increase any benefits or accelerate the payment or vesting of
any benefits to any employee or former employee or director of the Company
or any Subsidiary as a result of the execution of this Agreement and the
consummation of the transactions contemplated hereby; and (xiii) no
liability, claim, action, audit, examination or litigation has been made,
commenced or, to the Company's knowledge, threatened with respect to any
Employee Benefit Plan (other than for benefits payable in the ordinary
course).
(k) Employment Relations and Agreements. (i) Each of the Company and
its Subsidiaries is in substantial compliance with all federal, state or
other applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and has not and is not
engaged in any unfair labor practice; (ii) no material unfair labor
practice charge or complaint against the Company or any of its Subsidiaries
is pending before the National Labor Relations Board; (iii) there is no
labor strike, slowdown, stoppage or material dispute actually pending or,
to the knowledge of the Company, threatened against or involving the
Company or any of its Subsidiaries; (iv) no representation question exists
respecting the employees of the Company or any of its Subsidiaries; and (v)
no collective bargaining agreement is currently being negotiated by the
Company or any of its Subsidiaries and neither the Company nor any of its
Subsidiaries is or has been a party to a collective bargaining agreement;
and (vii) neither the Company nor any of its Subsidiaries has experienced
any material labor difficulty during the last three years. Except as
disclosed in Section 3.01(k) of the Company Disclosure Letter or in the
Commission Filings, there exist no employment, consulting, severance,
indemnification agreements or deferred compensation agreements between the
Company and any director, officer or employee
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of the Company or any agreement that would give any Person the right to
receive any payment from the Company as a result of the Offer or the
Merger.
(l) Taxes. Except as provided in Section 3.01(l) of the Company
Disclosure Letter:
(i) Tax Returns. The Company and each of its subsidiaries, has timely
filed or caused to be timely filed with the appropriate taxing authorities
all Federal and other material returns, statements, forms and reports for
Taxes (as hereinafter defined) ("Returns") that are required to be filed
by, or with respect to, the Company and such subsidiaries. The Returns
reflect accurately all material liability for Taxes of the Company and such
subsidiaries for the periods covered thereby. "Taxes" means all taxes,
assessments, charges, duties, fees, levies or other governmental charges,
including, without limitation, all Federal, state, local, foreign and other
income, franchise, profits, capital gains, capital stock, transfer, sales,
use, occupation, property, excise, severance, windfall profits, stamp,
license, payroll, withholding and other taxes, assessments, charges,
duties, fees, levies or other governmental charges of any kind whatsoever
(whether payable directly or by withholding and whether or not requiring
the filing of a Return), all estimated taxes, deficiency assessments,
additions to tax, penalties and interest and shall include any liability
for such amounts as a result either of being a member of a combined,
consolidated, unitary or affiliated group or of a contractual obligation to
indemnify any person or other entity.
(ii) Payment of Taxes. All material Taxes and Tax liabilities of the
Company and its subsidiaries have been timely paid or adequately disclosed
and fully provided for as a liability on the financial statements of the
Company and its subsidiaries in accordance with generally accepted
accounting principles.
(iii) Other Tax Matters. (A) Section 3.01(l)(iii)(A) of the Company
Disclosure Letter sets forth (1) each taxable year or other taxable period
of the Company or any of its subsidiaries for which an audit or other
examination of Taxes by the appropriate tax authorities of any nation,
state or locality is currently in progress (or scheduled to be conducted)
together with the names of the respective tax authorities conducting (or
scheduled to conduct) such audits or examinations and a description of the
material subject matter of such audits or examinations, (2) the most recent
taxable year or other taxable period for which an audit or other
examination relating to Federal income taxes of the Company and its
subsidiaries has been finally completed and the disposition of such audit
or examination, (3) the taxable years or other taxable periods of the
Company or any of its subsidiaries which will not be subject to the
normally applicable statute of limitations by reason of the existence of
circumstances that would
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cause any material statute of limitations for applicable Taxes to be
extended, (4) the amount of any proposed adjustments (and the principal
reason therefor) relating to any Returns for Tax liability of the Company
or any of its subsidiaries which have been proposed or assessed by any
taxing authority and (5) a list of all notices received by the Company or
any of its subsidiaries from any taxing authority relating to any issue
which could affect the Tax liability of the Company or any of its
subsidiaries, which issue has not been finally determined and which, if
determined adversely to the Company or any such subsidiaries, could result
in a material Tax liability.
(B) Neither the Company nor any of its subsidiaries has been
included in any "consolidated," "unitary" or "combined" Return (other than
Returns which include only the Company and any subsidiaries of the Company)
provided for under the law of the United States, any foreign jurisdiction
or any state or locality with respect to Taxes for any taxable period for
which the statute of limitations has not expired.
(C) All material Taxes which the Company or any of its
subsidiaries is (or was) required by law to withhold or collect have been
duly withheld or collected, and have been timely paid over to the proper
authorities to the extent due and payable.
(D) There are no tax sharing, allocation, indemnification or
similar agreements or arrangements in effect as between the Company, any
subsidiary, or any predecessor or affiliate thereof and any other party
under which Parent, Purchaser or the Company (or any of its subsidiaries)
could be liable for any Taxes or other claims of any party other than the
Company or any subsidiary of the Company.
(E) No indebtedness of the Company or any of its subsidiaries
consists of "corporate acquisition indebtedness" within the meaning of
Section 279 of the Code.
(F) Neither the Company nor any of its subsidiaries has been
required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of its subsidiaries, and the Internal Revenue Service has
not initiated or proposed any such adjustment or change in accounting
method.
(m) Liabilities. Neither the Company nor any of its Subsidiaries has
any claims, liabilities or indebtedness, contingent or otherwise,
outstanding except (i) as set forth in the consolidated balance sheet of
the Company as of December 31, 1996, or referred to in the footnotes
thereto, (ii) for liabilities incurred subsequent to December 31, 1996 in
the ordinary course of business not involving borrowings by the Company or
any of its Subsidiaries, (iii) as otherwise disclosed in the Commission
Filings or (iv)
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such claims, liabilities or indebtedness which would not have a material
adverse effect on the Condition of the Company and its Subsidiaries taken
as a whole. Neither the Company nor any of its Subsidiaries is in default
in respect of the material terms and conditions of any indebtedness or
other agreement.
(n) Intellectual Properties. In the operation of its business the
Company and its Subsidiaries have used, and currently use, domestic and
foreign patents, patent applications, patent licenses, software licenses,
know-how licenses, trade names, trademarks, copyrights, unpatented
inventions, service marks, trademark registrations and applications,
service xxxx registrations and applications, copyright registrations and
applications, trade secrets and other confidential proprietary information
(collectively, as so used, the "Intellectual Property"). Section 3.01(n) of
the Company Disclosure Letter contains an accurate and complete list of all
Intellectual Property which is of material importance to the operation of
the business of the Company and its Subsidiaries. The Company (or the
Subsidiary indicated) owns the entire right, title and interest in and to
the Intellectual Property listed on such Section 3.01(n) of the Company
Disclosure Letter (including, without limitation, the exclusive right to
use and license the same), except where the failure to own such right,
title or interest would not have a material adverse effect on the Condition
of the Company and its Subsidiaries taken as a whole, and each item
constituting part of the Intellectual Property which is owned by the
Company or a Subsidiary and listed on Section 3.01(n) of the Company
Disclosure Letter has been, to the extent indicated in Section 3.01(n) of
the Company Disclosure Letter, duly registered with, filed in or issued by,
as the case may be, the United States Patent and Trademark Office or such
other government entities, domestic or foreign, as are indicated in Section
3.01(n) of the Company Disclosure Letter and such registrations, filings
and issuances remain in full force and effect, except where the failure to
be so registered, filed or issued or for such registrations, filings or
issuances would not have a material adverse effect on the Condition of the
Company and its Subsidiaries taken as a whole. There are no pending, or to
the knowledge of the Company, threatened proceedings or litigation or other
adverse claims affecting or with respect to the Intellectual Property of
the Company. Section 3.01(n) of the Company Disclosure Letter lists all
notices or claims currently pending or received by the Company or any of
its Subsidiaries during the past two years which claim infringement,
contributory infringement, inducement to infringe, misappropriation or
breach by the Company or any of its Subsidiaries of any domestic or foreign
patents, patent applications, patent licenses and know-how licenses, trade
names, trademark registrations and applications, service marks, copyrights,
copyright registrations or applications, unpatented inventions, trade
secrets or other confidential proprietary information. There is, to the
knowledge of the Company, no reasonable basis upon which a claim may be
asserted against the Company or any of its Subsidiaries, for
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infringement, contributory infringement, inducement to infringe,
misappropriation or breach of any domestic or foreign patents, patent
applications, patent licenses, know-how licenses, trade names, trademark
registrations and applications, common law trademarks, service marks,
copyrights, copyright registrations or applications, trade secrets or other
confidential proprietary information, other than as would not have a
material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole. To the knowledge of the Company, no Person
is infringing the Intellectual Property.
(o) Proxy Statement, Schedule l4D-9 and Schedule l4D-1. The definitive
proxy statement and related materials, if required, to be furnished to the
holders of Common Stock in connection with the Merger pursuant to Section
4.04 hereof (the "Proxy Statement") will comply in all material respects
with the Exchange Act and the rules and regulations thereunder and any
other applicable laws. If at any time prior to the Shareholders' Meeting
(as defined herein) any event occurs which should be described in an
amendment or supplement to the Proxy Statement, the Company will file and
disseminate, as required, an amendment or supplement which complies in all
material respects with the Exchange Act and the rules and regulations
thereunder and any other applicable laws. Prior to its filing with the
Commission, the amendment or supplement shall be delivered to Parent and
Sub and their counsel. None of the information supplied by the Company for
inclusion or incorporation by reference in (i) the documents pursuant to
which the Offer will be made, including the Offer Documents or (ii) the
Proxy Statement, will, in the case of the Offer Documents, at the
respective times the Offer Documents are filed with the Commission, or in
the case of the Proxy Statement at the date such information is supplied
and at the Effective Time, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements made, in light of the circumstance under which they are made,
not misleading. None of the information supplied by the Company in the
Schedule 14D-9, at the respective times the Schedule 14D-9 is filed with
the Commission, will contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
light of the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made with
respect to any information with respect to Parent, Sub or their officers,
directors or affiliates provided to the Company by Parent or Sub in writing
for inclusion in the Schedule 14D-9. The Schedule l4D-9 will comply in all
material respects with the Exchange Act and the rules and regulations
thereunder and any other applicable laws. If at any time prior to the
expiration or termination of the Offer any event occurs which should be
described in an amendment or supplement to the Schedule l4D-9 or any
amendment or supplement thereto, the Company will file and disseminate, as
required, an amendment or supplement which complies in all material
respects with
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the Exchange Act and the rules and regulations thereunder and any other
applicable laws. Prior to its filing with the Commission, the amendment or
supplement shall be delivered to Parent and Sub and their counsel.
(p) Broker's or Finder's Fee. Except for Xxxxxx Brothers (whose fees
and expenses will be paid by the Company in accordance with the Company's
agreement with such firm, a true and correct copy of which has been
previously delivered to Parent by the Company) and the fees referred to in
Section 7.01(b) hereof, no agent, broker, Person or firm acting on behalf
of the Company is, or will be, entitled to any fee, commission or broker's
or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(q) Environmental Laws and Regulations. Except as set forth on Section
3.01(q) of the Company Disclosure Letter and except as would not reasonably
be expected to have a material adverse effect on the Condition of the
Company and its Subsidiaries, to the knowledge of the Company, (a)
Hazardous Materials have not at any time been Released or disposed of on
any Company Property or, any property adjoining or adjacent to any Company
Property, (b) the Company and each of its Subsidiaries are in compliance in
all material respects with all Environmental Laws and the requirements of
any permits issued under such Environmental Laws with respect to any
Company Property, (c) there are no past, pending or threatened material
Environmental Claims against the Company or any of its Subsidiaries or any
Company Property and (d) there are no facts or circumstances, conditions or
occurrences regarding any Company Property or any property adjoining or
adjacent to any Company Property, that could reasonably be anticipated (A)
to form the basis of a material Environmental Claim against the Company or
any of its Subsidiaries or any Company Property or (B) to cause such
Company Property to be subject to any material restrictions on its
ownership, occupancy, use or transferability under any Environmental Law.
For purposes of this Agreement, the following terms shall have the
following meanings: (A) "Company Property" means any real property and
improvements owned or leased by the Company or any of its Subsidiaries; (B)
"Hazardous Materials" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous
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materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," or words of similar import, under
any applicable Environmental Law; and (iii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority; (C) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code or rule of common law
in effect and in each case as amended as of the date hereof and Closing
Date, and any judicial or administrative interpretation thereof applicable
to the Company or its operations or property as of the date hereof and
Closing Date, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health, safety or
Hazardous Materials, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air
Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 3808 et seq.; and (D) "Environmental Claims" means any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings under any Environmental Law or any permit
issued under any such Environmental Law (for purposes of this subclause
(D), "Claims"), including without limitation (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment;
and (E) "Release" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying or seeping into or
upon any land or water or air, or otherwise entering into the environment.
(r) State Takeover Statutes; Charter Provisions. The Board of
Directors of the Company has approved the Offer, the Merger and this
Agreement and such approval is sufficient to render inapplicable to the
Offer, the Merger and this Agreement and the other transactions
contemplated by this Agreement, the provisions of Section 912 of the New
York Business Corporation Law and the provisions of Article SEVENTH of the
Company's Restated and Amended Certificate of Incorporation.
(s) Voting Requirements. The affirmative vote of the holders of at
least two thirds of the outstanding shares of Company Common Stock entitled
to be cast approving this Agreement is the only vote of the holders of any
class or series of the
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Company's capital stock necessary to approve this Agreement and the
transactions contemplated by this Agreement.
(t) Rights Agreement. (i) The Company and the Board of Directors of
the Company have taken and will maintain in effect all necessary action to
(i) render the Rights Agreement inapplicable with respect to the Offer, the
Merger and the other transactions contemplated by this Agreement and (ii)
ensure that (y) neither Parent nor Sub nor any of their Affiliates (as
defined in the Rights Agreement) or Associates (as defined in the Rights
Agreement) is considered to be an Acquiring Person (as defined in the
Rights Agreement) and (z) the provisions of the Rights Agreement, including
the occurrence of a Distribution Date (as defined in the Rights Agreement),
are not and shall not be triggered by reason of the announcement or
consummation of the Offer, the Merger or the consummation of any of the
other transactions contemplated by this Agreement. The Board of Directors
of the Company, at a meeting duly called and held, has resolved that the
Rights shall be redeemed immediately prior to the acceptance for payment
and purchase of any of the outstanding shares of Common Stock pursuant to
the Offer in accordance with the terms of this Agreement provided that this
Agreement shall not have been terminated in accordance with its terms. The
Company has delivered to Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date of this Agreement.
(u) Opinion of Financial Advisor. The Company has received the opinion
of Xxxxxx Brothers to the effect that, as of the date of this Agreement,
the consideration to be received in the Offer and the Merger by the
Company's shareholders, other than Parent and Sub, is fair to such
shareholders from a financial point of view, subject to the qualifications
and assumptions contained therein, and a complete and correct signed copy
of such opinion has been, or promptly upon receipt thereof will be,
delivered to Parent.
3.02 Representations and Warranties of Parent and Sub. Each of Parent
and Sub represents and warrants to the Company as follows:
(a) Due Organization; Good Standing and Corporate Power. Parent is a
corporation duly organized and validly existing and in good standing under
the laws of Sweden. Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York.
(b) Authorization and Validity of Agreement. Each of Parent and Sub
has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The
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execution, delivery and performance of this Agreement by Parent and Sub,
and the consummation by each of them of the transactions contemplated
hereby, have been duly authorized by the Board of Directors of Parent and
the Board of Directors of Sub. No other corporate action on the part of
either of Parent or Sub is necessary to authorize the execution, delivery
and performance of this Agreement by each of Parent and Sub and the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by each of Parent and Sub and is a valid
and binding obligation of each of Parent and Sub, enforceable against each
of Parent and Sub in accordance with its terms, except that such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, and general equitable principles.
(c) Consents and Approvals; No Violations. Assuming (i) the filings
required under the HSR Act are made and the waiting period thereunder has
been terminated or has expired, (ii) voluntary notification under
Exon-Xxxxxx is made, (iii) the requirements of the Exchange Act relating to
the Proxy Statement and the Offer are met and (iv) the filing of the
Certificate of Merger and other appropriate merger documents, if any, as
required by the laws of the State of New York is made, the execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent
and Sub of the transactions contemplated hereby will not: (1) violate any
provision of the Articles of Association of Parent or the Certificate of
Incorporation or By-Laws of the Sub; (2) violate any statute, ordinance,
rule, regulation, order or decree of any court or of any governmental or
regulatory body, agency or authority applicable to Parent or Sub or by
which either of their respective properties or assets may be bound; (3)
require any filing with, or permit, consent or approval of, or the giving
of any notice to any governmental or regulatory body, agency or authority;
or (4) result in a violation or breach of, conflict with, constitute (with
or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, or result in
the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of the Parent, Sub or any of their subsidiaries
under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit, agreement, lease or other
instrument or obligation to which Parent or Sub or any of their
subsidiaries is a party, or by which they or their respective properties or
assets may be bound except for in the case of clauses (3) and (4) above for
such filing, permit, consent, approval or violation, which would not
reasonably be expected to have a material adverse effect on the Condition
of the Parent and Sub, taken as a whole, or could be reasonably likely to
prevent or materially delay consummation of the transactions contemplated
by this Agreement.
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(d) Offer Documents, Schedule l4D-9 and Proxy Statement. The Offer
Documents will comply in all material respects with the Exchange Act and
the rules and regulations thereunder and any other applicable laws. If at
any time prior to the expiration or termination of the Offer any event
occurs which should be described in an amendment or supplement to the
Schedule l4D-1 or any amendment or supplement thereto, Sub will file and
disseminate, as required, an amendment or supplement which complies in all
material respects with the Exchange Act and the rules and regulations
thereunder and any other applicable laws. Prior to its filing with the
Commission, the amendment or supplement shall be delivered to the Company
and its counsel. The written information supplied or to be supplied by
Parent and Sub for inclusion in the Proxy Statement and the Schedule l4D-9
of the Company will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements made, in light of the circumstances under
which they are made, not misleading. Notwithstanding the foregoing, no
representation or warranty is made with respect to any information with
respect to the Company or its officers, directors and affiliates provided
to Parent or Sub by the Company in writing for inclusion in the Offer
Documents or amendments or supplements thereto.
(e) Broker's or Finder's Fee. Except for Salomon Brothers, Inc (whose
fees and expenses as financial advisor to Parent and Sub will be paid by
Parent or Sub), no agent, broker, Person or firm acting on behalf of Parent
or Sub is, or will be, entitled to any fee, commission or broker's or
finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(f) Financing. Parent has entered into two credit facilities with a
Swedish bank (copies of which have been delivered to the Company) pursuant
to which credit agreements such bank, subject to certain conditions set
forth in such credit agreements, will provide all funds necessary, together
with funds available to the Parent and Sub, to consummate the transactions
contemplated hereby.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.01 Access to Information Concerning Properties and Records. During
the period commencing on the date hereof and ending on the earlier of (x) the
Closing Date and
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(y) the date on which this Agreement is terminated pursuant to Section 6.01
hereof, the Company shall, and shall cause each of its Subsidiaries to, upon
reasonable notice, afford Parent and Sub, and their respective counsel,
accountants, consultants and other authorized representatives, reasonable access
during normal business hours to the employees, properties, books and records of
the Company and its Subsidiaries in order that they may have the opportunity to
make such investigations as they shall desire of the affairs of the Company and
its Subsidiaries; such investigation shall not, however, affect the
representations and warranties made by the Company in this Agreement. The
Company shall furnish promptly to Parent and Sub (a) a copy of each report,
schedule, registration statement and other document filed by it or its
Subsidiaries during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its or its
Subsidiaries' business, properties and personnel as Parent and Sub may
reasonably request. The Company agrees to cause its officers and employees to
furnish such additional financial and operating data and other information and
respond to such inquiries as Parent and Sub shall from time to time request.
4.02 Confidentiality. Information obtained by Parent, Sub and their
respective counsel, accountants, consultants and other authorized
representatives pursuant to Section 4.01 hereof shall be subject to the
provisions of the Confidentiality Agreement between the Company and Parent dated
April 4, 1997 (the "Confidentiality Agreement").
4.03 Conduct of the Business of the Company Pending the Closing Date.
The Company agrees that, except as permitted, required or specifically
contemplated by, or otherwise described in, this Agreement or otherwise
consented to or approved in writing by Parent (which consent or approval shall
not be unreasonably withheld), during the period commencing on the date hereof
until such time as nominees of Parent shall comprise two thirds of the members
of the Board of Directors of the Company or this Agreement shall have been
terminated pursuant to Section 6.01 hereof:
(a) The Company and each of its Subsidiaries will conduct their
respective operations only according to their ordinary and usual course of
business consistent with past practice and will use their reasonable best
efforts to preserve intact their respective business organization, keep
available the services of their officers and employees and maintain
satisfactory relationships with licensors, suppliers, distributors,
clients, joint venture partners, and others having significant business
relationships with them;
(b) Neither the Company nor any of its Subsidiaries shall (i) make any
change in or amendment to its Restated and Amended Certificate of
Incorporation or By-Laws (or comparable governing documents); (ii) issue or
sell any shares of its capital stock (other than in connection with the
exercise of Options outstanding on the date hereof) or any of its other
securities, or issue any securities convertible into, or options,
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warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any shares
of its capital stock or any of its other securities, or make any other
changes in its capital structure; (iii) sell or pledge or agree to sell or
pledge any stock owned by it in any of its Subsidiaries except pursuant to
certain call options in respect of the capital stock of certain of its
dealership subsidiaries, as set forth in Section 3.01(c)(ii) of the Company
Disclosure Letter; (iv) declare, pay, set aside or make any dividend (other
than regular quarterly cash dividends of $.0625 per share of Common Stock)
or other distribution or payment with respect to, or split, combine, redeem
or reclassify, or purchase or otherwise acquire any shares of its capital
stock or its other securities, ; (v) (A) enter into any contract or
commitment with respect to capital expenditures with a value in excess of,
or requiring expenditures by the Company and its Subsidiaries in excess of,
$1.0 million, individually, or enter into contracts or commitments with
respect to capital expenditures with a value in excess of, or requiring
expenditures by the Company and its Subsidiaries in excess of, $3.0
million, in the aggregate; (B) acquire (by merger, consolidation, or
acquisition of stock or assets) any corporation, partnership or other
business or division thereof; or (C) enter into, amend, modify, supplement
or cancel any other material contract, (vi) except in the ordinary course
of business, consistent with past practice, acquire a material amount of
assets or securities or release or relinquish any material contract rights;
(vii) except in the ordinary course of business, consistent with past
practice, and except to the extent required under existing employee and
director benefit plans, agreements or arrangements as in effect on the date
of this Agreement, increase the compensation or fringe benefits of any of
its directors, officers or employees, except for increases in salary or
wages of employees of the Company or its subsidiaries who are not officers
of the Company in the ordinary course of business in accordance with past
practice, or grant any severance or termination pay not currently required
to be paid under existing severance plans or enter into any employment,
consulting or severance agreement or arrangement with any present or former
director, officer or other employee of the Company or any of its
Subsidiaries (other than employment contracts with the individuals listed
on Section 4.03(b)(vii) of the Company Disclosure Letter), or establish,
adopt, enter into or amend or terminate any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any directors, officers or employees; (viii) transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or
subject to any lien, any material assets or incur or modify any
indebtedness or other material liability, other than in the ordinary course
of business, or issue any debt securities or assume, guarantee or endorse
or otherwise as an accommodation become responsible for the obligations of
any person or, other than in the ordinary course of business consistent
with past practice, make any
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loan or other extension of credit; (ix) agree to the settlement of any
material claim or litigation; (x) make any material tax election or settle
or compromise any material tax liability; (xi) permit any insurance policy
naming it as beneficiary or a loss payable payee to be cancelled without
notice to Parent; (xii) except as required by applicable law or generally
accepted accounting principals, make any material change in its method of
accounting; (xiii) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its Subsidiaries not
constituting an inactive Subsidiary (other than the Merger); or (xiv)
agree, in writing or otherwise, to take any of the foregoing actions; and
(c) The Company shall not, and shall not permit any of its
Subsidiaries to, (i) take any action, engage in any transaction or enter
into any agreement which would cause any of the representations or
warranties set forth in Section 3.01 hereof to be untrue as of the Closing
Date, or (ii) purchase or acquire, or offer to purchase or acquire, any
shares of capital stock of the Company.
4.04 Proxy Statement. If shareholder approval of the Merger is
required by law or by the Company's Restated and Amended Certificate of
Incorporation or By-Laws, as promptly as practicable, following Parent's request
the Company will prepare and file a preliminary Proxy Statement with the
Commission and will use its reasonable best efforts to respond to the comments
of the Commission, if any, in connection therewith and to furnish all
information regarding the Company required in the definitive Proxy Statement
(including, without limitation, financial statements and supporting schedules
and certificates and reports of independent public accountants). Parent, Sub and
the Company will cooperate with each other in the preparation of the Proxy
Statement. Without limiting the generality of the foregoing, each of Parent and
Sub will furnish to the Company the information relating to it required by the
Exchange Act to be set forth in the Proxy Statement. Promptly after the
expiration or termination of the Offer, if required by the New York Business
Corporation Law in order to consummate the Merger, the Company will cause the
definitive Proxy Statement to be mailed to the shareholders of the Company and,
if necessary, after the definitive Proxy Statement shall have been so mailed,
promptly circulate amended, supplemental or supplemented proxy material and, if
required in connection therewith, resolicit proxies. The Company will not use
any proxy material in connection with the meeting of its shareholders without
Parent's prior approval.
4.05 Shareholder Approval. (a) Promptly following the purchase of
shares of Common Stock pursuant to the Offer, if required by New York Business
Corporation Law in order to consummate the Merger, the Company, acting through
its Board of Directors, shall, in accordance with applicable law, duly call,
convene and hold a meeting of the holders of
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Common Stock (the "Shareholders' Meeting") for the purpose of voting upon this
Agreement and the Merger and the Company agrees that this Agreement and the
Merger shall be submitted at such meeting. The Company shall use its reasonable
best efforts to solicit from its shareholders proxies, and shall take all other
action necessary and advisable, to secure the vote of shareholders required by
applicable law and the Company's Restated and Amended Certificate of
Incorporation or By-Laws to obtain the approval for this Agreement. Subject to
Section 4.07 hereof, the Company agrees that it will include in the Proxy
Statement the recommendation of its Board of Directors that holders of Common
Stock approve and adopt this Agreement and approve the Merger. Parent will cause
all shares of Common Stock owned by Parent and its Subsidiaries (including Sub)
to be voted in favor of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the event that Sub shall acquire
at least 90% of the outstanding Company Common Stock, the Company agrees, at the
request of Parent and Sub, subject to Article V, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with Section 905 of the New York Business
Corporation Law.
4.06 Reasonable Best Efforts. Subject to the terms and conditions
provided herein, each of the Company, Parent and Sub shall, and the Company
shall cause each of its Subsidiaries to, cooperate and use their respective
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
their respective reasonable best efforts to obtain, prior to the Closing Date,
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
its Subsidiaries as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Offer and
the Merger; provided, however, that no loan agreement or contract for borrowed
money shall be repaid except as currently required by its terms, in whole or in
part, and no contract shall be amended to increase the amount payable thereunder
or otherwise to be more burdensome to the Company or any of its Subsidiaries in
order to obtain any such consent, approval or authorization without first
obtaining the written approval of Parent and Sub.
4.07 No Solicitation of Other Offers. (a) The Company and its
affiliates and each of their respective officers, directors, employees,
representatives and agents shall immediately cease any discussions or
negotiations with any other parties that may be ongoing with respect to any
Acquisition Proposal (as defined below). Neither the Company nor any of its
affiliates, shall, directly or indirectly, take (and the Company shall not
authorize or permit
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its or its affiliates, officers, directors, employees, representatives,
consultants, investment bankers, attorneys, accountants or other agents or
affiliates, to so take) any action to (i) encourage, solicit or initiate the
making of any Acquisition Proposal, (ii) enter into any agreement with respect
to any Acquisition Proposal or (iii) participate in any way in discussions or
negotiations with, or, furnish or disclose any information to, any Person (other
than Parent or Sub) in connection with, or take any other action to facilitate
any inquiries or the making of any proposal (including without limitation by
taking any action that would make the Rights Agreement, Section 912 of the New
York Business Corporation Law or the provisions of Article SEVENTH of the
Company's Restated and Amended Certificate of Incorporation inapplicable to an
Acquisition Proposal) that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal, provided, however, that the Company, in response
to an unsolicited Acquisition Proposal and in compliance with its obligations
under Section 4.07(b) hereof, may participate in discussions or negotiations
with or furnish information to any third party which proposes a transaction
which the Board of Directors of the Company reasonably determines will result in
a Superior Proposal if the Board of Directors believes (and has been advised by
independent outside counsel) that failing to take such action would constitute a
breach of its fiduciary duties. In addition, neither the Board of Directors of
the Company nor any Committee thereof shall (x) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or Sub the approval and
recommendation of the Offer and this Agreement or (y) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal, provided that the
Company may recommend to its shareholders an Acquisition Proposal and in
connection therewith withdraw or modify its approval or recommendation of the
Offer or the Merger if (i) the Board of Directors of the Company has determined
that the Acquisition Proposal is a Superior Proposal, (ii) all the conditions to
the Company's right to terminate this Agreement in accordance with Section
6.01(f) hereof have been satisfied (including the expiration of the three
Business Day period described therein and the payment of all amounts required
pursuant to Section 7.01 hereof) and (iii) simultaneously with such withdrawal,
modification or recommendation, this Agreement is terminated in accordance with
Section 6.01(f) hereof. Any actions permitted under, and taken in compliance
with, this Section 4.07 shall not be deemed a breach of any other covenant or
agreement of such party contained in this Agreement.
"Acquisition Proposal" shall mean any inquiry, proposal or offer from
any Person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its Subsidiaries or of
over 10% of any class of equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Company or any of its Subsidiaries, any merger, consolidation,
business combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries, other than the transactions contemplated by
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this Agreement, or any other transaction the consummation of which could
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated hereby.
"Superior Proposal" shall mean a bona fide proposal made by a third party to
acquire all of the outstanding shares of the Company pursuant to a tender offer,
a merger or a sale of all of the assets of the Company (x) on terms which a
majority of the members of the Board of Directors of the Company determines in
its good faith reasonable judgment (based on the advice of independent outside
financial and legal advisors) to be more favorable to the Company and its
shareholders than the transactions contemplated hereby and (y) for which
financing is then available (it being understood that financing evidenced by
highly confident letters and similar letters shall not be considered "available"
for purposes of this Section).
(b) In addition to the obligations of the Company set forth in
paragraph (a), on the date of receipt thereof, the Company shall advise Parent
of any request for information or of any Acquisition Proposal, or any inquiry or
proposal with respect to any Acquisition Proposal, the material terms and
conditions of such request or Acquisition Proposal, and the identity of the
person making any such Acquisition Proposal. The Company will keep Parent fully
informed of the status and details (including amendments or proposed amendments)
of any such request or Acquisition Proposal and keep Parent fully informed as to
the details of any information requested of or provided by, the Company and as
to the details of all discussions or negotiations with respect to any such
request, takeover proposal or inquiry.
(c) Immediately following the purchase of Shares pursuant to the
Offer, the Company will request each person which has heretofore executed a
confidentiality agreement in connection with its consideration of acquiring the
Company or any portion thereof (the "Confidentiality Agreements") to return all
confidential information heretofore furnished to such person by or on behalf of
the Company.
4.08 Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent and Sub shall give prompt notice to the Company, of
the occurrence, of failure to occur, of any event, which occurrence or failure
to occur would be likely to cause any representation or warranty contained in
this Agreement to be untrue in any material respect at any time from the date of
this Agreement to the Effective Time. Each of the Company and Parent shall give
prompt notice to the other party of any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
4.09 HSR Act. (a) Each party hereto shall (i) take promptly all
actions necessary to make the filings required of it or any of its affiliates
under the applicable Antitrust
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Laws (as defined in Section 4.09(e) hereof) in connection with this Agreement
and the transactions contemplated hereby, (ii) comply at the earliest
practicable date with any request for additional information or documentary
material received by it or any of its affiliates from the Federal Trade
Commission (the "FTC") or the Antitrust Division of the Department of Justice
(the "Antitrust Division") and (iii) cooperate with one another in connection
with any filing under applicable Antitrust Laws and in connection with resolving
any investigation or other inquiry concerning the transactions contemplated by
this Agreement initiated by any Antitrust Authority (as defined in Section
4.09(e) hereof).
(b) Each party hereto shall use its reasonable best efforts to resolve
such objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any Antitrust Law. Without limiting the
generality of the foregoing, "reasonable best efforts" shall include, without
limitation:
(i) in the case of each of Parent and the Company:
(A) filing with the appropriate Antitrust Authorities no later
than the fifth Business Day following the date hereof a Notification
and Report Form with respect to the transactions contemplated by this
Agreement; and
(B) if Parent or the Company receives a second request for
information and documents from an Antitrust Authority, substantially
complying with such second request within 60 days following the date
of its receipt thereof;
(ii) in the case of Parent only, taking any and all actions reasonably
necessary, proper or advisable to cause the HSR Condition and Section
5.01(b) hereof to be satisfied and to permit the Closing to occur as soon
as possible, but in any event on or prior to the Outside Date (as defined
below) (it being understood that, without limiting Parent's obligations
hereunder, the timing of the Closing shall be as set forth in Section
2.11); provided, however, that Parent's obligations hereunder shall not
include agreeing to dispose of or hold separately all or any material
portion of the business or assets of Parent and its subsidiaries, taken as
a whole or the Company and its Subsidiaries, taken as a whole, or to take
any other action which would materially and adversely effect the business,
assets or operations of Parent and its subsidiaries taken as a whole or the
Company and its Subsidiaries taken as a whole; and
(iii) in the case of the Company only, subject to Parent's compliance
with clauses (i) and (ii) above, not frustrating or impeding Parent's
strategy or negotiating positions with any Antitrust Authority.
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(c) Notwithstanding the foregoing, Parent's obligations pursuant to
Section 4.09(b)(ii) above shall not include defending any administrative,
judicial or legislative action brought by any Antitrust Authority or other
Person or otherwise litigating against any Antitrust Authority or other person.
Should Parent nonetheless elect to litigate against any Antitrust Authority or
other person, the Company shall cooperate with Parent in any such proceeding.
(d) Each party hereto shall promptly inform the other parties of any
material communication made to, or received by such party from, any Antitrust
Authority or any other governmental or regulatory authority regarding any of the
transactions contemplated hereby. In addition, and without limiting the
generality of the foregoing, Parent and the Company each shall cause its counsel
to (i) afford to the other party's counsel the opportunity to receive and to
review for a reasonable period in advance of filing or submission to any
Antitrust Authority all forms, letters and memoranda (excluding documents
submitted as attachments or enclosed with such forms, letters or memoranda)
proposed to be filed or submitted to any Antitrust Authority regarding the
transactions contemplated hereby, and give reasonable consideration to any
comments or proposals such counsel may make with respect to any such forms,
letters or memoranda, (ii) give reasonable advance notice to the other party's
counsel of each meeting or pre-arranged telephone call with any Antitrust
Authority regarding the transactions contemplated hereby, so that such counsel
may request to attend or otherwise participate therein, and to give reasonable
consideration to such request, and (iii) promptly inform the other party's
counsel of the substance of each other material communication (written or oral,
in person or by telephone) with any Antitrust Authority regarding the
transactions contemplated hereby.
(e) For purposes hereof, (i) "Antitrust Authorities" means the FTC,
the Antitrust Division and the attorneys general of the several states of the
United States and (ii) "Antitrust Law" means the Xxxxxxx Act, as amended, the
Xxxxxxx Act, as amended, the Antitrust Improvements Act, the Federal Trade
Commission Act, as amended, and all other federal and state statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines, and other
laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade.
4.10 Exon-Xxxxxx. The Company and Parent shall, as soon as possible
and in any event within ten days of the date of this Agreement, file a voluntary
notification pursuant to, and in compliance with, Exon-Xxxxxx and shall use
their best efforts to respond to any inquiries from governmental officials with
respect thereto.
4.11 Employee Benefits. (a) Until the first anniversary of the
Effective Time, Parent shall ensure that all employees and officers of the
Company receive compensation and benefits in the aggregate substantially
comparable to the compensation and benefits received by such individuals
immediately prior to the date hereof.
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(b) Until the first anniversary of the Effective Time, Parent shall
keep in effect all severance policies that are applicable to employees and
officers of the Company immediately prior to the date hereof.
(c) Following the Effective Time, (i) Parent shall ensure that no
employee welfare benefit plan adopted by the Company shall have any preexisting
condition limitations and (ii) Parent shall honor all premiums and deductibles
paid by the employees, officers and directors of the Company under all Employee
Benefit Plans up to (and including) the Effective Time.
(d) Following the Effective Time, for purposes of eligibility and
vesting, Parent shall honor all service credit accrued by the employees,
officers and directors of the Company under all Employee Benefit Plans up to
(and including) the Effective Time.
(e) Following the Effective Time, Parent shall honor all employment
contracts with employees and officers and all contracts for services rendered
with directors of the Company.
4.12 Directors' and Officers' Insurance; Indemnification. (a) The
certificate of incorporation and the by-laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's certificate of incorporation and by-laws on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
the Company, unless such modification is required by law.
(b) For six years from the Effective Time, the Surviving Corporation
shall either (x) maintain in effect the Company's current directors' and
officers' liability insurance covering those persons who are currently covered
on the date of this Agreement by the Company's directors' and officers'
liability insurance policy (a copy of which has been heretofore delivered to
Parent) (the "Indemnified Parties"); 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 currently paid by the Company for such insurance which the
Company represents to be $80,050 for the twelve month period ending on July 1,
1997; and provided further that if the annual premiums of such insurance
coverage exceed such amount, the Surviving Corporation shall be obligated to
obtain a policy with the greatest coverage available for a cost not exceeding
such amount; provided further that the Surviving Corporation may substitute for
such Company policies, policies with at least the same coverage containing terms
and conditions which are no less advantageous and provided that said
substitution does not result in any gaps
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or lapses in coverage with respect to matters occurring prior to the Effective
Time or (y) cause the Parent's, directors' and officers' liability insurance
then in effect to cover those persons who are covered on the date of this
Agreement by the Company's directors' and officers' liability insurance policy
with respect to those matters covered by the Company's directors' and officers'
liability policy.
(c) In furtherance of and not in limitation of the preceding
paragraph, Parent and Sub agree that the officers and directors of the Company
that are defendants in any litigation commenced by shareholders of the Company
with respect to (x) the performance of their duties as officers and/or directors
of the Company under federal or state law (including litigation under federal
and state securities laws) and (y) Sub's offer or proposal to acquire the
Company, including, without limitation, any and all such litigation commenced on
or after the date of this Agreement (the "Subject Litigation") shall be entitled
to be represented, at the reasonable expense of the Company, in the Subject
Litigation by one counsel (including, if appropriate, one local counsel in each
jurisdiction in which a case is pending) each of which such counsel shall be
selected by a plurality of such director and officer defendants; provided that
neither Parent nor the Company shall be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld) and that a condition to the indemnification payments provided in
Section 4.12(a) hereof shall be that such officer/director defendant not have
settled any Subject Litigation without the consent of Parent; and provided
further that neither Parent nor the Company shall have any obligation hereunder
to any officer/director defendant when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become final and
non-appealable, that indemnification of such officer/director defendant in the
manner contemplated hereby is prohibited by applicable law.
(d) At the Effective Time, the Company shall remain liable for all of
its obligations under the existing indemnification agreements with each of the
directors and officers of the Company.
4.13 Rights Agreement. The Company shall not redeem the Rights or
amend (other than to delay the Distribution Date (as defined therein) or to
render the Rights inapplicable to the Offer and the Merger) or terminate the
Rights Agreement prior to the Effective Time without the consent of the Parent,
unless required to do so by a court of competent jurisdiction.
4.14. Public Announcements. Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party of
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such release or statement or without the prior consent of the other party, which
shall not be unreasonably withheld; provided, however, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement as may be required by law or any listing agreement with a
national securities exchange or automated quotation system which Parent or the
Company is a party if it has used all reasonable efforts to consult with the
other party and to obtain such party's consent but has been unable to do so in a
timely manner.
4.15 Transfer Tax. Parent shall pay any New York State Real Estate
Transfer Tax and New York City Real Property Transfer Tax (the "Transfer Taxes")
and any similar taxes in any other jurisdiction (and any penalties and interest
with respect to such taxes), which become payable in connection with the Offer
and the Merger, on behalf of the shareholders of the Company. Parent and the
Company shall cooperate in the preparation, execution and filing of any required
returns with respect to such taxes (including returns on behalf of the
shareholders of the Company) and in the determination of the portion of the
consideration allocable to the real property of the Company and the Subsidiaries
in New York State and City (or in any other jurisdiction, if applicable). The
terms of the Offer to Purchase and of the Proxy Statement shall provide that the
shareholders of the Company shall be deemed to have agreed to be bound by the
allocation established pursuant to this Section 4.14 in the preparation of any
return with respect to the Transfer Taxes and any similar taxes, if applicable.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of Parent, Sub and the
Company. The respective obligations of Parent and Sub, on the one hand, and the
Company, on the other hand, to effect the Merger are subject to the satisfaction
or waiver (subject to applicable law) at or prior to the Effective Time of each
of the following conditions:
(a) Approval of Company's Shareholders. To the extent required by
applicable law, this Agreement and the Merger shall have been approved and
adopted by holders of two thirds of the outstanding share of the Common
Stock of the Company entitled to vote in accordance with applicable law (if
required by applicable law) and the Company's Certificate of Incorporation
and By-Laws;
(b) HSR Act. Any waiting period (and any extension thereof) under the
HSR Act applicable to the Merger shall have expired or been terminated;
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(c) Exon-Xxxxxx. The review periods, if applicable, under Exon-Xxxxxx
shall have expired or have been terminated.
(d) Injunction. No preliminary or permanent injunction or other order
shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits the consummation of the Offer or
the Merger and the transactions contemplated by this Agreement and which is
in effect at the Effective Time, provided, however, that, in the case of a
decree, injunction or other order, each of the parties shall have used
reasonable best efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any decree, injunction or
other order that may be entered;
(e) Statutes. No statute, rule, regulation, executive order, decree or
order of any kind shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits the consummation of
the Offer or the Merger or has the effect of making the purchase of the
Common Stock illegal; and
(f) Minimum Condition. Sub shall have purchased shares of Common Stock
pursuant to the Offer in a number sufficient to satisfy the Minimum
Condition.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by the Company's
shareholders:
(a) by mutual consent of the Company, on the one hand, and of Parent
and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any court of competent jurisdiction or any governmental or
regulatory agency shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting
the acceptance for payment of, or payment for, shares of Common Stock
pursuant to the Offer or the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
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(c) by Parent, on the one hand, or the Company, on the other hand, if
the Effective Time shall not have occurred within 180 days after
commencement of the Offer (the "Outside Date") unless the Effective Time
shall not have occurred because of a material breach of any representation,
warranty, obligation, covenant, agreement or condition set forth in this
Agreement on the part of the party seeking to terminate this Agreement;
(d) by Parent if the Offer is terminated or expires in accordance with
its terms without Sub having purchased any Common Stock thereunder due to
an occurrence which would result in a failure to satisfy any of the
conditions set forth on Exhibit A hereto, unless any such failure shall
have been caused by or resulted from the failure of Parent or Sub to
perform in any material respect any covenant or agreement of either of them
contained in this Agreement or the material breach by Parent or Sub of any
representation or warranty of either of them contained in this Agreement;
(e) by the Parent, in the event of a breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement
which (A) would give rise to the failure of a condition set forth in
paragraph (e) or (g) of Annex A, (B) cannot or has not been cured prior to
the earlier of (i) 15 days after the giving of written notice of such
breach to the Company and (ii) two business days prior to the date on which
the Offer expires and (C) has not been waived by Parent pursuant to the
provisions hereof;
(f) by either Parent, on the one hand, or the Company, on the other
hand, if the Board of Directors of the Company determines that an
Acquisition Proposal constitutes a Superior Proposal and the Board believes
(and has been advised by independent outside counsel) that a failure to
terminate this Agreement and enter into an agreement to effect the Superior
Proposal would constitute a breach of its fiduciary duties; provided,
however the Company may not terminate this Agreement pursuant to this
Section 6.01(f) unless and until three Business Days have elapsed following
delivery to the other party of a written notice of such determination by
the Board of Directors and during such three Business Day period the
Company has fully cooperated with the Parent, including, without
limitation, informing the Parent of the terms and conditions of such
Superior Proposal, and the identity of the Person making such Proposal,
with the intent of enabling both parties to agree to a modification of the
terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected; and provided further that at the end
of such three Business Day period the Board of Directors of the Company
determines that the Acquisition Proposal constitutes a Superior Proposal
and the Board continues to believe (and has again been advised by
independent outside counsel) that a failure to terminate this Agreement and
enter into
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an agreement to effect the Superior Proposal would constitute a breach of
its fiduciary duties; provided further that this Agreement shall not
terminate pursuant to this Section 6.01(f) unless (i) prior to such
termination Parent has received all fees and expenses set forth in Section
7.01 hereof by wire transfer in same day funds and (ii) simultaneously with
such termination the Company enters into a definitive acquisition, merger
or similar agreement to effect the Superior Proposal which acquisition
agreement permits the Company to terminate the acquisition agreement in the
event the Board of Directors of the Company determines to effect a
transaction with Parent;
(g) by the Company, in the event of a breach by the Parent or Sub of
any representation, warranty, covenant or agreement contained in this
Agreement which cannot or has not been cured within 15 days after the
giving of written notice of such breach to the Parent and Sub, except, in
any case where such breaches are not reasonably likely to affect adversely
Parent's or Sub's ability to complete the Offer or Merger; or
(h) by the Company if Parent or Sub shall have (i) failed to commence
the Offer within ten days following the date of this Agreement, (ii)
terminated the Offer or (iii) failed to pay for shares of Common Stock
pursuant to the Offer on or prior to the Outside Date, unless in the case
of (i), (ii) or (iii) such failure shall have been caused by the failure of
the Company to satisfy the conditions set forth in paragraph (e) or (g) of
Annex A.
6.02 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 6.01 hereof by Parent or Sub, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent, Sub or
the Company, except that Sections 4.02, 3.01(p) and 7.01 hereof and this Section
6.02 shall survive any termination of this Agreement. Nothing in this Section
6.02 shall relieve any party to this Agreement of liability for breach of this
Agreement.
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ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. (a) Except as provided in paragraph (b) below,
all costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(b) If this Agreement is terminated other than solely because of a
material breach of the representations or warranties of Parent or Sub or a
failure of Parent or Sub to fulfill a material covenant or condition contained
herein, then the Company shall (except as required to be earlier paid in
accordance with Section 6.01(f) hereof) within two days after termination has
occurred, pay to Parent in same day funds all of Parent's reasonably documented
out-of-pocket expenses.
(c) If this Agreement is terminated by Parent in accordance with
Section 6.01(d) or (e) hereof because of the occurrence of any of the events set
forth in clause (iv)(e), (f) or (g) of Annex A or if this Agreement is
terminated by the Company in accordance with Section 6.01(f) hereof, then the
Company shall (except as required to be earlier paid in accordance with Section
6.01(f) hereof) pay to Parent in same day funds, in addition to the amounts
required to be paid pursuant to Section 7.01(b), $12,000,000.
7.02 Representations and Warranties. The respective representations
and warranties of the Company, on the one hand, and Parent and Sub, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Closing and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section
7.02 shall have no effect upon any other obligation of the parties hereto,
whether to be performed before or after the Effective Time.
7.03 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent or Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any
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such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
7.04 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
(a) if to the Company, to it at:
The Xxxxxxx Corporation
X.X. Xxx 000
Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: President
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, III, Esq.
(b) if to either Parent or Sub, to it at:
Lift Acquisition Company, Inc.
x/x XX Xxxxxxxxxx XX
0-000 00 Xxxxxx
Xxxxxx
Attention: President and Chief
Executive Officer
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with a copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.05 Entire Agreement. This Agreement and the annex, schedules and
other documents referred to herein or delivered pursuant hereto, collectively
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto, other than the
Confidentiality Agreement.
7.06 Binding Effect; Benefit; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and, with respect to
the provisions of Section 4.12 hereof, shall inure to the benefit of the persons
or entities benefitting from the provisions thereof who are intended to be
third-party beneficiaries thereof and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties. Except as provided in the
immediately preceding sentence, nothing in this Agreement, expressed or implied,
is intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
7.07 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
shareholder approval), by action taken by the respective Boards of Directors of
Parent, Sub and the Company or by the respective officers authorized by such
Boards of Directors, provided, however, that after any such shareholder
approval, no amendment shall be made which by law requires further approval by
such shareholders without such further approval.
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7.08 Further Actions. Each of the parties hereto agrees that, subject
to its legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, to the extent that such conditions are within its
control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.09 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
7.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
7.11 Applicable Law. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws rules
thereof.
7.12 Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.13 Certain Definitions. (a) "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a group and a government or other department or
agency thereof.
(b) "Subsidiary" with respect to the Company, shall mean and include
(x) any partnership of which the Company or any Subsidiary is a general partner
or (y) any other entity in which the Company or any of its Subsidiaries owns or
has the power to vote 50% or more of the equity interests in such entity having
general voting power to participate in the election of the governing body of
such entity.
7.14 Parent Guarantee. Parent agrees to take all action necessary to
cause Sub to perform all of its agreement, covenants and obligations under this
Agreement. Parent shall be liable for any breach of any representation,
warranty, agreement, covenant or obligation of Sub under this Agreement.
7.15 Submission to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally:
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(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the general jurisdiction of the courts of the
State of New York sitting in the City of New York, the courts of the United
States of America for the Southern District of New York and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
will be in accordance with the laws of the State of New York and agrees to
appoint an agent for service of process in the State of New York within 20
business days of the date hereof;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law.
[SIGNATURE PAGE FOLLOWS]
-46-
51
IN WITNESS WHEREOF, each of Parent, Sub and the Company have caused
this Agreement to be executed by their respective officers thereunto duly
authorized, all as of the date first above written.
BT INDUSTRIES AB
By /s/ Xxxx-Xxxx Ridderstrale
------------------------------------------
Name: Xxxx-Xxxx Ridderstrale
Title: President and Chief Executive Officer
By /s/ Per Zaunders
------------------------------------------
Name: Per Zaunders
Title: Vice President and Chief Financial
Officer
LIFT ACQUISITION COMPANY, INC.
By /s/ Xxxx-Xxxx Ridderstrale
------------------------------------------
Name: Xxxx-Xxxx Ridderstrale
Title: President
THE XXXXXXX CORPORATION
By /s/ Xxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board of Directors
and Chief Executive Officer
-47-
52
ANNEX A
to
Agreement and
Plan of Merger
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex A is
appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer or the Merger
Agreement, Purchaser shall not be required to accept for payment or subject to
any applicable rules and regulations of the Commission, including Rule 14e-1c
under the Exchange Act, pay for any shares of Common Stock tendered pursuant to
the Offer and may terminate or amend the Offer and may postpone the acceptance
of, and payment for, shares of Common Stock, if (i) there shall not have been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of shares of Common Stock which, together with shares of Common Stock owned by
Parent or Purchaser (or any affiliate of Parent or Purchaser), represent
two-thirds of the total voting power of all shares of capital stock of the
Company outstanding on a fully diluted basis (the "Minimum Condition"), (ii) any
applicable waiting period (and any extension thereof) under the HSR Act shall
not have expired or been terminated (the "HSR Condition"), (iii) any applicable
waiting period under Exon-Xxxxxx shall not have expired or been terminated (the
"Exon-Xxxxxx condition") or (iv) if, at any time on or after the date of the
Merger Agreement and at or before the time of payment for any such shares of
Common Stock (whether or not any shares of Common Stock have theretofore been
accepted for payment or paid for pursuant to the Offer) any of the following
shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other Person, domestic or foreign, before any court
of competent jurisdiction or governmental authority or agency, domestic or
foreign, (i) challenging or seeking to, or which could reasonably be
expected to make illegal, impede, delay or otherwise directly or indirectly
restrain, prohibit or make materially more costly the Offer or the Merger
or seeking to obtain material damages, (ii) seeking to prohibit or
materially limit the ownership or operation by Parent or Purchaser of all
or any material portion of the business or assets of the Company and its
Subsidiaries taken as a whole or to compel Parent or Purchaser to dispose
of or hold separately all or any material portion of the business or assets
of Parent or the Company and its Subsidiaries taken as a whole, or seeking
to impose any limitation on the ability of Parent or Purchaser to conduct
its business or own such assets, (iii) seeking to impose limitations on the
ability of Parent or Purchaser effectively to exercise full rights of
ownership of the shares of Common Stock, including, without limitation, the
right to vote any shares of Common Stock acquired or owned by Sub or Parent
on all matters properly presented to the Company's shareholders, (iv)
seeking to require divestiture by Parent or Purchaser of any shares of
Common Stock; (v) seeking any material diminution in the
53
ANNEX A
Page A-2
benefits expected to be derived by Parent or Purchaser as a result of the
transactions contemplated by the Offer or the Merger, (vi) otherwise
directly or indirectly relating to the Offer or the Merger and which, would
have a material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole or Parent and its subsidiaries taken as a
whole or the value of the shares of Common Stock, or (vii) otherwise
materially adversely affecting the Condition of the Company and its
Subsidiaries taken as a whole;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
Parent, Purchaser, the Company or any Subsidiary or (ii) the Offer or the
Merger, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of the
HSR Act or Exon-Xxxxxx to the Offer or to the Merger, which could
reasonably be expected to directly or indirectly, result in any of the
consequences referred to in clauses (i) through (vii) of paragraph (a)
above;
(c) any change shall have occurred, or Parent shall have become aware
of any fact, that has had or would have a material adverse effect on the
Condition of the Company and its Subsidiaries taken as a whole;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market (excluding any coordinated
trading halt triggered solely as a result of a specified decrease in a
market index), (ii) any decline in either the Dow Xxxxx Industrial Average
or the Standard & Poor's Index of 500 Industrial Companies or in the New
York Stock Exchange Composite Index in excess of 20% measured from the
close of business on the trading day next preceding the date of the Merger
Agreement, (iii) any material adverse change in the general political,
market, economic or financial conditions in the United States or abroad
that would have a material adverse effect upon the Condition of the Company
and its Subsidiaries taken as a whole, (iv) any material change in United
States or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (v) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or any other jurisdiction in which any bank or other financial
institution in any manner involved with the financing of the Offer or the
Merger is incorporated, (vi) any material limitation (whether or not
mandatory) by any Federal, state or foreign
54
ANNEX A
Page A-3
governmental authority or agency on, the extension of credit by banks or
other lending institutions, (vii) a commencement or escalation of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States or (viii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, an
acceleration or worsening thereof;
(e) any of the representations or warranties made by the Company in
the Merger Agreement that are qualified as to materiality shall be untrue
or incorrect in any respect or any such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect,
in each case as of the date of this Agreement and the scheduled expiration
date of the Offer, except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of
such date;
(f) the Company's Board of Directors shall have withdrawn, modified or
amended in any respect adverse to Parent or Purchaser its recommendation of
the Offer or the Merger, or shall have resolved to do so;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under this Agreement; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms,
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Parent and
the Purchaser and may be asserted by the Parent of the Purchaser, or may be
waived by the Parent or the Purchaser, in whole or in part at any time and from
time to time in its sole discretion (subject to the terms of the Merger
Agreement). The failure by the Parent or the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Parent or the Purchaser
concerning the events described in this Annex A will be final and binding upon
all parties.
55
Exhibit 6
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 TO RIGHTS AGREEMENT (this "Amendment") is
entered into as of June 16, 1997 by and between THE XXXXXXX CORPORATION, a New
York Corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY,
as rights agent (the "Rights Agent"), amending the Rights Agreement, dated as of
March 1, 1997, between the Company and the Rights Agent (the "Rights
Agreement").
Recitals of the Company:
The Company has duly authorized the execution and delivery of this
Amendment, and all things necessary to make this Amendment a valid agreement of
the Company have been done. This Amendment is entered into pursuant to Section
27 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Defined Terms. Terms defined in the Rights Agreement and used
herein shall have the meanings given to them in the Rights Agreement.
2. Amendments to Section 1. (a) Section 1(a) of the Rights Agreement
is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Agreement to the contrary, so long
as the Merger Agreement has not been terminated pursuant to the terms
thereof, or at any time after the purchase of shares of Common Stock
pursuant to the Offer, neither BT Industries AB nor any Affiliate of BT
Industries AB shall be deemed to be an Acquiring Person solely by reason
of the execution, delivery or performance of the Merger Agreement or the
announcement, making or consummation of the Offer, the acquisition of
Common Stock pursuant to the Offer or the Merger, the consummation of the
Merger or any other transactions contemplated by the Merger Agreement."
(b) Section 1 of the Rights Agreement is amended to add the
following provisions at the end thereof:
"(p) For purposes of this Agreement:
'Effective Time' shall have the meaning assigned to such
term in the Merger Agreement;
'Merger Agreement' shall mean the Agreement and Plan of
Merger dated as of June 16, 1997 among BT Industries AB, a
corporation incorporated under the laws of Sweden,
56
Lift Acquisition Company, Inc., a New York corporation and a wholly
owned subsidiary of BT Industries AB, and the Company, as amended
from time to time in accordance with its terms;
'Merger' shall have the meaning assigned to such term in
the Merger Agreement;
'Offer' shall have the meaning assigned to such term in
the Merger Agreement; and
1. Amendment of Section 3(a). Section 3(a) of the Rights Agreement
is amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Rights Agreement to the
contrary, so long as the Merger Agreement has not been terminated
pursuant to the terms thereof, or at any time after the purchase of
shares of Common Stock pursuant to the Offer, a Distribution Date
shall not be deemed to have occurred solely as the result of the
execution, delivery or performance of the Merger Agreement or the
announcement, making or consummation of the Offer, the acquisition
of Common Shares pursuant to the Offer or the Merger, the
consummation of the Merger or any other transactions contemplated by
the Merger Agreement."
2. Amendment of Section 7(a). Section 7(a) of the Rights Agreement
is amended by deleting the word "or" in the penultimate line of such subsection
and substituting in its place", "and inserting immediately after the word
"hereof" in the last line thereof the following clause: "or (iv) immediately
after the acquisition of shares of Common Stock pursuant to the Offer (the
earliest of (i), (ii), (iii) or (iv) being herein referred to as the "Expiration
Date"). Upon the Expiration Date, the Rights shall expire."
3. Effectiveness. This Amendment shall be deemed effective as of
June 16, 1997 as if executed on such date. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
4. Miscellaneous. This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state. This
Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed an original and all such
counterparts shall together constitute but one and the same instrument.
-2-
57
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the day and year first above written.
Attest: THE XXXXXXX CORPORATION
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxx
------------------------------ ------------------------------
By: Xxxx X. Xxxxxxxxx By: Xxxxx X. Xxxxxxx
Title: Vice President, General Title:President and Chief
Counsel and Secretary Operating Officer
AMERICAN STOCK TRUST &
Attest: TRANSFER COMPANY
/s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ ------------------------------
By: Xxxxx Xxxxxx By: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
- 3 -
58
EXHIBIT B
CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION
The Restated and Amended Certificate of Incorporation of The Xxxxxxx
Corporation shall be amended to read as follows:
FIRST: The name of the corporation shall be THE XXXXXXX CORPORATION
(the "Corporation").
SECOND: The purpose of the Corporation shall be to engage in any lawful
act or activity for which corporations may be organized under the BCL, provided
that the Corporation is not formed to engage in any act or activity requiring
the consent or approval of any official, department, board, agency or other
body without such prior consent or approval first being obtained.
THIRD: The duration of the Corporation shall be perpetual.
FOURTH: The office of the Corporation in the State of New York shall be
located in the Village of Xxxxxx, County of Chenango.
FIFTH: The total authorized capital stock of the Corporation shall be
One Thousand shares of Common Stock, par value one cent ($0.01) per share.
No holder of any of the shares of the capital stock of the Corporation
shall be entitled as of right to purchase or to subscribe for any unissued
stock of any class, or any additional shares of any class, to be issued by
reason of any increase of the authorized capital stock of the Corporation of
any class, or bonds, certificates of indebtedness, debentures, or other
securities convertible into stock of the Corporation or carrying any right to
purchase stock of any class, but any such unissued stock, or such additional
authorized issue to any stock, or of other securities convertible into stock or
carrying any right to purchase stock, may be issued and disposed of pursuant to
resolutions of the Board of Directors, to such persons, firms, corporations, or
associations and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its discretion.
SIXTH: The By-Laws may be adopted, amended or repealed by the Board of
Directors by a vote of a majority of the directors then holding office.
59
EXHIBIT B
Page 2
SEVENTH: The Secretary of State is designated as the agent of the
Corporation upon whom process against the Corporation may be served, and the
address to which the Secretary of State shall mail a copy of any process
against the Corporation served upon the Secretary of State is The Xxxxxxx
Corporation, Greene, New York.
EIGHTH: A director of the Corporation shall not be personally liable
to the Corporation or its shareholders for damages for any breach of duty in
such capacity except that the liability of a director shall not be eliminated
or limited if a judgment or other final adjudication adverse to the director
establishes that his/her acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or that the director
personally gained in fact a financial profit or other advantage to which the
director was not legally entitled or that his/her acts violated Section 719 of
the BCL. If the BCL is hereafter amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of directors of the Corporation shall be eliminated or limited to the fullest
extent permitted by the BCL, as so amended. Any repeal of this Article, or any
amendment of this Article insofar as it would in any way enlarge the liability
of any director of the Corporation, shall be ineffective with respect to any
acts or omissions occurring prior to the date of such repeal or amendment.
NINTH: The Corporation shall, to the fullest extent permitted by
applicable law, indemnify any person who is or was made, or threatened to be
made, a party to an action or proceeding, whether civil or criminal, including
an action by or in the right of any other corporation of any type or kind,
domestic or foreign, or any partnership, joint venture, trust, employee benefit
plan or other enterprise, which any director or officer of the Corporation is
serving or served in any capacity at the request of the Corporation, by reason
of the fact that he/she, his/her testator or intestate, is or was a director or
officer of the Corporation, or is serving or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement and
expenses, including attorneys' fees, or any appeal therein. Permissible
indemnification may be provided, as a matter of discretion, to any other person
in accordance with the provisions of the BCL, as from time to time amended, or
other applicable law. Any director or officer of the Corporation serving
(i) another corporation, of which a majority of the shares entitled to vote
in the election of its directors is held, directly or indirectly, by the
Corporation, or (ii) any employee benefit plan of either, in any capacity,
shall be deemed to be doing so at the request of the Corporation.
60
EXHIBIT B
Page 3
Any person entitled to be indemnified as a matter of right pursuant to
this provision may elect, to the extent permitted by law, to have the right to
indemnification interpreted on the basis of the applicable law in effect at the
time of the occurrence of the event or events giving rise to the action or
proceeding, or on the basis of the applicable law in effect at the time
indemnification is sought. The right to be indemnified pursuant to this
provision shall be a contract right and shall include the right to be paid by
the Corporation expenses incurred in defending any action or proceeding in
advance of its final disposition; provided, however, that, the payment of such
expenses incurred by a director or officer in his/her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including without limitation, service
to an employee benefit plan) in advance of the final disposition of such action
or proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it should ultimately be determined that such director or officer
is not entitled to be indemnified under this provision.
If a claim is not paid in full by the Corporation within ninety days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled also to be paid the expense of prosecuting such claim. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he/she has met the applicable standard of conduct, nor
an actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant had not met the applicable standard of conduct.
