EXHIBIT (c)(1)
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AGREEMENT AND PLAN OF MERGER
AMONG
SIEMENS ENERGY & AUTOMATION, INC.
MALIBU ACQUISITION CORP.
AND
XXXXX PRODUCTS CO.
Dated as of January 16, 2000
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Table of Contents
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Page
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ARTICLE I THE OFFER................................................................................ 2
Section 1.1. The Offer...................................................................... 2
Section 1.2. Company Actions................................................................ 4
Section 1.3. Stockholder Lists.............................................................. 5
Section 1.4. Directors; Section 14(f)....................................................... 5
ARTICLE II THE MERGER.............................................................................. 7
Section 2.1. The Merger..................................................................... 7
Section 2.2. Effective Time................................................................. 7
Section 2.3. Effects of the Merger.......................................................... 7
Section 2.4. Articles of Incorporation; Bylaws.............................................. 7
Section 2.5. Directors and Officers......................................................... 8
Section 2.6. Conversion of Securities....................................................... 8
Section 2.7. Dissenting Shares.............................................................. 8
Section 2.8. Surrender of Shares............................................................ 9
Section 2.9. No Further Transfer or Ownership Rights........................................ 10
Section 2.10. Treatment of Options........................................................... 10
Section 2.11. Closing........................................................................ 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................... 11
Section 3.1. Organization and Qualification................................................. 11
Section 3.2. Capitalization................................................................. 12
Section 3.3. Authority Relative to this Agreement........................................... 14
Section 3.4. Absence of Certain Changes..................................................... 14
Section 3.5. Reports........................................................................ 15
Section 3.6. Proxy Statement................................................................ 16
Section 3.7. Consents and Approvals; No Violation........................................... 16
Section 3.8. Brokerage Fees and Commissions................................................. 17
Section 3.9. Schedule 14D-9; Offer Documents................................................ 17
Section 3.10. Litigation..................................................................... 18
Section 3.11. Absence of Changes in Benefit Plans............................................ 18
Section 3.12. ERISA Compliance............................................................... 18
Section 3.13. Taxes.......................................................................... 22
Section 3.14. No Excess Parachute Payments; Termination Payments;
Section 162(m) of the Code..................................................... 23
Section 3.15. Compliance with Applicable Laws................................................ 23
Section 3.16. State Takeover Statutes........................................................ 25
Section 3.17. Contracts...................................................................... 26
Section 3.18. Labor Matters.................................................................. 27
Section 3.19. Title to Properties............................................................ 27
Section 3.20. Undisclosed Liabilities........................................................ 28
Section 3.21. Opinion of Company Financial Advisor........................................... 28
Section 3.22. Intellectual Property.......................................................... 28
Section 3.23. Insurance...................................................................... 30
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Section 3.24. Affiliate Transactions......................................................... 30
Section 3.25. Indemnification Claims......................................................... 31
Section 3.26. Absence of Questionable Payments............................................... 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.................................. 31
Section 4.1. Organization and Qualification................................................. 31
Section 4.2. Authority Relative to this Agreement........................................... 31
Section 4.3. Proxy Statement................................................................ 32
Section 4.4. Consents and Approvals; No Violation........................................... 32
Section 4.5. Financing...................................................................... 33
Section 4.6. Brokerage Fees and Commissions................................................. 33
Section 4.7. Schedule 14D-1; Offer Documents................................................ 33
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER................................................... 34
Section 5.1. Conduct of Business of the Company Pending the Merger.......................... 34
Section 5.2. Prohibited Actions by the Company.............................................. 34
ARTICLE VI COVENANTS............................................................................... 37
Section 6.1. No Solicitation................................................................ 37
Section 6.2. Access to Information.......................................................... 40
Section 6.3. Confidentiality Agreement...................................................... 40
Section 6.4. Reasonable Best Efforts........................................................ 40
Section 6.5. Indemnification of Directors and Officers...................................... 41
Section 6.6. Event Notices and Other Actions................................................ 42
Section 6.7. Third Party Standstill Agreements.............................................. 43
Section 6.8. Employee Stock Options; Employee Plans and Benefits and Employment Contracts... 43
Section 6.9. Meeting of the Company's Shareholders.......................................... 46
Section 6.10. Proxy Statement................................................................ 46
Section 6.11. Public Announcements........................................................... 46
Section 6.12. Shareholder Litigation......................................................... 47
Section 6.13. FIRPTA......................................................................... 47
Section 6.14. Redemption of Company Preferred Stock.......................................... 47
Section 6.15. Foreign Subsidiaries........................................................... 47
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER............................................... 47
Section 7.1. Conditions to Each Party's Obligation to Effect the Merger..................... 47
Section 7.2. Conditions to Obligations of Parent and Purchaser to Effect the Merger......... 48
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER........................................................ 48
Section 8.1. Termination.................................................................... 48
Section 8.2. Effect of Termination.......................................................... 51
Section 8.3. Expenses; Termination Fee...................................................... 51
Section 8.4. Amendment...................................................................... 53
Section 8.5. Extension; Waiver.............................................................. 53
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ARTICLE IX MISCELLANEOUS........................................................................... 53
Section 9.1. Non-Survival of Representations and Warranties................................. 53
Section 9.2. Entire Agreement; Assignment................................................... 53
Section 9.3. Enforcement of the Agreement................................................... 54
Section 9.4. Severability................................................................... 54
Section 9.5. Notices........................................................................ 54
Section 9.6. Failure or Indulgence Not Waiver; Remedies Cumulative.......................... 55
Section 9.7. Governing Law; Consent to Jurisdiction......................................... 55
Section 9.8. Descriptive Headings........................................................... 56
Section 9.9. Parties in Interest............................................................ 56
Section 9.10. Counterparts................................................................... 56
Section 9.11. Certain Definitions............................................................ 56
Section 9.12. Interpretation................................................................. 58
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AGREEMENT AND PLAN OF MERGER
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THIS IS AN AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
January 16, 2000, among Siemens Energy & Automation, Inc., a Delaware
corporation ("Parent"), Malibu Acquisition Corp., a Pennsylvania corporation and
a wholly owned subsidiary of Parent ("Purchaser"), and Xxxxx Products Co., a
Pennsylvania corporation (the "Company").
Background
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WHEREAS, the Board of Directors of the Company has determined that it is
fair to, advisable and in the best interests of the Company and each class of
the shareholders of the Company to enter into and consummate this Agreement with
Purchaser, providing for the merger (the "Merger") of Purchaser with and into
the Company, with the Company as the Surviving Corporation, in accordance with
the Pennsylvania Business Corporation Law of 1988, as amended (the "PBCL"), and
the other transactions contemplated hereby, upon the terms and subject to the
conditions set forth herein;
WHEREAS, the Board of Directors of Purchaser has approved the Merger of
Purchaser with and into the Company and such other transactions in accordance
with the PBCL upon the terms and subject to the conditions set forth herein;
WHEREAS, the Company and Purchaser have agreed that, upon the terms and
subject to the conditions contained herein, Purchaser shall commence an offer
(as amended or supplemented in accordance with this Agreement, the "Offer") to
purchase for cash all of the issued and outstanding (i) shares of common stock,
par value $1.00 per share (the "Company Common Stock"), of the Company, at a
price per share of $54.71, net to the seller in cash (the "Common Stock Price")
and (ii) shares of Series A preferred stock, par value of $1.00 per share (the
"Company Preferred Stock"), at a price par share of $21.88, net to the seller in
cash (the "Preferred Stock Price") (the Company Common Stock and the Company
Preferred Stock being collectively referred to as the "Securities").
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for each Security in the Offer and the Merger is fair
to the holders of each class of such Security and has resolved to recommend that
the holders of such Securities tender their Securities pursuant to the Offer and
approve and adopt this Agreement and the Merger upon the terms and subject to
the conditions set forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger;
WHEREAS, simultaneously with the execution and delivery of this Agreement
and in order to induce Parent and Purchaser to enter into this Agreement,
certain stockholders of the Company (the "Certain Stockholders") have executed
and delivered to Parent and Purchaser an agreement (the "Tender and Option
Agreement") pursuant to which the Certain Stockholders
have agreed to take specified actions in furtherance of the transactions
contemplated by this Agreement, including tendering their Securities into the
Offer and granting Parent and Purchaser the Purchase Option (as such term is
defined in the Tender and Option Agreement) with respect to such Securities; and
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
intending to be legally bound hereby, Parent, Purchaser and the Company hereby
agree as follows:
ARTICLE I
THE OFFER
Section 1.1. The Offer.
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(a) Subject to the provisions of this Agreement, and provided that this
Agreement shall not have been terminated in accordance with Section 8.1 and so
long as none of the events or circumstances set forth in Annex A hereto shall
have occurred and be continuing, not later than the fifth business day from the
date of public announcement of the execution of this Agreement, Parent shall
cause Purchaser to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), the Offer at
(i) a price equal to the Common Stock Price for the Company Common Stock and
(ii) a price equal to the Preferred Stock Price for the Company Preferred Stock.
The obligation of Purchaser to consummate the Offer, to accept for payment and
to pay for any Securities tendered pursuant to the Offer shall be subject to
those conditions set forth in Annex A. It is agreed that the conditions to the
Offer set forth on Annex A are for the benefit of Purchaser and may be asserted
by Purchaser regardless of the circumstances giving rise to any such condition
(including any action or inaction by Purchaser) and Purchaser expressly reserves
the right, in its sole discretion, to waive any such condition; provided that,
without the consent of the Company, Parent or Purchaser shall not waive the
Minimum Condition (as defined in Annex A) or the condition set forth in
paragraph (h) of Annex A (except that Purchaser expressly reserves the right, in
its sole direction, to waive the condition set forth in clause (y) in the
definition of the Minimum Condition contained in the first paragraph of Annex
A). The initial expiration date of the Offer shall be the 20th business day
following the commencement of the Offer (determined using Rule 14d-1(c)(6) under
the Exchange Act).
(b) Purchaser expressly reserves the right, in its sole discretion, to
modify and make changes to the terms and conditions of the Offer, provided that
without the prior consent of the Company, no modification or change may be made
which (i) decreases the consideration payable in the Offer (except as permitted
by this Agreement), (ii) changes the form of consideration payable in the Offer
(other than by adding consideration), (iii) changes the Minimum Condition, (iv)
decreases the maximum number of Securities sought pursuant to the Offer, (v)
changes the material conditions to the Offer in a manner adverse to the Company
or its shareholders or option holders, or (vi) imposes additional material
conditions to the Offer (other than in respect of any consideration which is
payable in addition to the Common Stock Price and Preferred Stock Price).
Notwithstanding the foregoing, Purchaser may (but shall not be required under
this Agreement or otherwise to), without the consent of the Company, (i) extend
the Offer
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on one or more occasions for such period as may be determined by Purchaser in
its sole discretion (each such extension period not to exceed 10 business days
at a time), if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligations to accept for payment and pay for
Securities shall not be satisfied or waived, (ii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff thereof applicable
to the Offer, (iii) extend the Offer on one or more occasions for an aggregate
period of not more than 10 business days if the Minimum Condition has been
satisfied but less than 80% of each of the Company Common Stock and Company
Preferred Stock have been validly tendered and not properly withdrawn, and (iv)
extend the Offer for any reason on one occasion for an aggregate period of not
more than 10 business days beyond the latest expiration date that would
otherwise be permitted under clause (i), (ii) or (iii) of this sentence,
notwithstanding the prior satisfaction of the conditions to the Offer set forth
on Annex A. On the terms and subject to the conditions of the Offer and this
Agreement, promptly after expiration of the Offer Purchaser shall accept for
payment and pay for, and Parent shall cause Purchaser to accept for payment and
pay for, all Securities validly tendered and not withdrawn pursuant to the Offer
that Purchaser becomes obligated to purchase pursuant to the Offer.
Notwithstanding the foregoing, Purchaser may in its sole discretion elect to
provide for a subsequent offering period pursuant to, and on the terms required
by, Rule 14d-11 under the Exchange Act.
(c) On the date of commencement of the Offer, Parent and Purchaser shall
file with the SEC with respect to the Offer a Tender Offer Statement on Schedule
14D-1 (together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule 14D-1") with respect to the Offer which will
comply in all material respects with the provisions of applicable federal
securities laws, and will contain the offer to purchase relating to the Offer
(the "Offer to Purchase") and forms of related letters of transmittal and
summary advertisement (which documents, together with any supplements or
amendments thereto and including the exhibits thereto, are referred to herein
collectively as the "Offer Documents"). Parent shall deliver copies of the
proposed forms of the Schedule 14D-1 and the Offer Documents to the Company
within a reasonable time prior to the commencement of the Offer for review and
comment by the Company and its counsel. Parent agrees to provide the Company and
its counsel in writing any comments that Purchaser, Parent or their counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt thereof. Each of the Company, Parent and Purchaser shall
promptly correct any information provided by it for use in the Schedule 14D-1 or
the Offer Documents that shall have become false or misleading in any material
respect and Parent and Purchaser further agree to take all steps necessary to
cause such Schedule 14D-1 or Offer Documents as so corrected to be filed with
the SEC and disseminated to the shareholders of the Company, as and to the
extent required by applicable federal securities laws.
(d) The parties understand and agree that the Common Stock Price and
Preferred Stock Price have been calculated based upon the accuracy of the
representation and warranty set forth in Section 3.2(a) and that, in the event
the number of outstanding shares of Company Common Stock or the number of shares
of Company Common Stock issuable upon the exercise or conversion of, or subject
to, options, warrants, securities or other agreements exceeds the amounts
specifically set forth in Section 3.2(a) (assuming for this purpose the
conversion of outstanding Company Preferred Stock into Company Common Stock)
(including without
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limitation as a result of any stock split, stock dividend, including any
dividend or distribution of securities convertible into shares of the Company
Common Stock, recapitalization, or other like change occurring after the date of
this Agreement) or the number of Options and exercise prices therefor set forth
in Section 3.2(a) of the Company Disclosure Schedule are inaccurately stated in
any manner adverse to Parent or Purchaser, the Common Stock Price and Preferred
Stock Price shall be appropriately adjusted downward. The provisions of this
paragraph (d) shall not, however, affect the representation set forth in Section
3.2(a). Notwithstanding the foregoing, there shall be no adjustment pursuant to
this paragraph (d) with respect to the issuance of shares of Company Common
Stock upon the exercise of Options disclosed on Section 3.2(a) of the Company
Disclosure Schedule.
(e) Notwithstanding any provision to the contrary contained in this
Agreement, Parent and Purchaser may terminate the Offer as it relates to the
Company Preferred Stock in the event that Parent or Purchaser has acquired all
of the outstanding shares of Company Preferred Stock, including pursuant to the
exercise of the Purchase Option pursuant to the Tender and Option Agreement.
Section 1.2. Company Actions
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(a) The Company hereby consents to the Offer and represents and warrants
that (i) its Board of Directors, at a meeting duly called and held on January
14, 2000, has duly and by unanimous vote adopted resolutions approving the
Offer, the Merger, this Agreement and the Tender and Option Agreement and the
other transactions contemplated hereby and thereby (collectively, the
"Transactions"), determining that the terms of the Offer and the Merger are fair
to, and in the best interests of, each class of the Company's shareholders and
recommending acceptance of the Offer and adoption of the Merger and this
Agreement by the shareholders of the Company, (ii) the Company has taken all
necessary action to render the provisions of any anti-takeover statute, rule or
regulation that to the Company's knowledge may be applicable to the Transactions
(including Sections 2538 through 2588, inclusive, of the PBCL) inapplicable with
respect to the Transactions, and (iii) Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial
Advisors, Inc. ("Xxxxxxxx Xxxxx") has delivered to the Company's Board of
Directors its opinion (the "Fairness Opinion") that each of the Common Stock
Price and the Preferred Stock Price to be received by the Company's shareholders
is fair, from a financial point of view, to such shareholders and a complete and
correct signed copy of such opinion has been delivered by the Company to Parent.
The Company has been authorized by Xxxxxxxx Xxxxx to permit the inclusion of the
Fairness Opinion (and, subject to prior review and consent by Xxxxxxxx Xxxxx, a
reference thereto) in the Offer Documents and in the Schedule 14D-9 referred to
below and the Proxy Statement. The Company hereby consents to the inclusion in
the Offer Documents of the recommendations of the Company's Board of Directors
described in this Section 1.2. The Company has been advised that all of its
directors and executive officers intend either to tender their Securities
pursuant to the Offer or (solely in the case of directors and executive officers
who would as a result of the tender incur liability under Section 16(b) of the
Exchange Act) to vote in favor of the Merger.
(b) The Company shall file with the SEC on the date of the commencement of
the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (together
with all amendments and supplements thereto and including the exhibits thereto,
the
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"Schedule 14D-9") which shall comply in all material respects with the
provisions of applicable federal securities laws, and will contain such
recommendations of the Board in favor of the Offer and the Merger, and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 promulgated under the
Exchange Act and shall mail such Schedule 14D-9 together with the Offer
Documents. The Company shall deliver the proposed forms of the Schedule 14D-9
and the exhibits thereto to Parent within a reasonable time prior to the
commencement of the Offer for review and comment by Parent and its counsel.
Parent and its counsel shall be given a reasonable opportunity to review any
amendments and supplements to the Schedule 14D-9 prior to their filing with the
SEC or dissemination to shareholders of the Company. The Company agrees to
provide Parent and its counsel in writing any comments that the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after receipt thereof. Each of the Company, Parent and Purchaser shall
promptly correct any information provided by it for use in the Schedule 14D-9
that shall have become false or misleading in any material respect and the
Company further agrees to take all steps necessary to cause such Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to the shareholders of
the Company, as and to the extent required by applicable federal securities
laws.
Section 1.3. Stockholder Lists. In connection with the Offer, the Company
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shall promptly furnish to, or cause to be furnished to, Parent and Purchaser
mailing labels, security position listings, any non-objecting beneficial owner
lists and any available listing or computer file containing the names and
addresses of the record holders of the Securities as of a recent date and of
those persons becoming record holders subsequent to such date (to the extent
available), together with all other relevant, material information in the
Company's possession or control regarding the beneficial owners of Securities
and shall furnish Parent and Purchaser with such information and assistance as
Parent, Purchaser or their respective agents may reasonably request in
communicating the Offer to the record and beneficial holders of Securities.
Subject to the requirements of 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 Purchaser shall, and shall cause each of their
affiliates to, hold the information contained in any of such labels and lists in
confidence, use such information only in connection with the Offer and the
Merger, and, if this Agreement is terminated, deliver to the Company all copies
of such information or extracts therefrom then in their possession or under
their control.
Section 1.4. Directors; Section 14(f).
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(a) Immediately upon the acceptance for payment of and
payment for any Securities by Purchaser or any of its affiliates pursuant to the
Offer, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
will give Purchaser, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors of the Company equal to the
product of (i) the total number of directors on the Board of Directors of the
Company (giving effect to the increase in the size of such Board pursuant to
this Section 1.4) and (ii) the percentage that the number of votes represented
by Securities beneficially owned by Purchaser and its affiliates (including
Securities so accepted for payment and purchased) bears to the number of votes
represented by Securities then outstanding. In furtherance thereof, concurrently
with such acceptance for payment and payment for such Securities the Company
shall, upon request of Parent and in compliance with Section 14(f) of the
Exchange Act and Rule 14f-1
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promulgated thereunder, use its best efforts promptly either to increase the
size of its Board of Directors or to secure the resignations of such number of
its incumbent directors, or both, as is necessary to enable such designees of
Parent to be so elected or appointed to the Company's Board of Directors, and,
subject to applicable law, the Company shall take all reasonable actions
available to the Company to cause such designees of Parent to be so elected or
appointed. At such time, the Company shall, if requested by Parent and subject
to applicable law, also take all reasonable action necessary to cause persons
designated by Parent to constitute at least the same percentage (rounded up to
the next whole number) as is on the Company's Board of Directors of (i) each
committee of the Company's Board of Directors, (ii) each board of directors (or
similar body) of each subsidiary of the Company and (iii) each committee (or
similar body) of each such board.
(b) Notwithstanding the foregoing, the Company shall use its best efforts
to ensure that, in the event that Purchaser's designees are elected to the Board
of Directors of the Company, such Board of Directors shall have, at all times
prior to the Effective Time, at least two directors who are directors on the
date of this Agreement and who are not officers or affiliates of the Company (it
being understood that for purposes of this sentence, a director of the Company
shall not be deemed an affiliate of the Company solely as a result of his status
as a director of the Company), Parent or any of their respective subsidiaries
(the "Independent Directors"); and provided further, that, in such event, if the
number of Independent Directors shall be reduced below two for any reason
whatsoever the remaining Independent Director may designate a person to fill
such vacancy who is not an officer or affiliate of the Company, Parent, or any
of their respective subsidiaries and such person shall be deemed to be an
Independent Director for purposes of this Agreement or, if no Independent
Directors then remain, the other directors may designate two persons to fill
such vacancies who shall not be officers or affiliates of the Company, Parent or
any of their respective subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to applicable law,
the Company shall promptly take all action reasonably requested by Parent
necessary to effect any such election, including mailing to its shareholders the
information required by Section 14(f) of the Exchange Act and Rule 14(f)-1
promulgated thereunder (or, at Parent's request, furnishing such information to
Parent for inclusion in the Offer Documents initially filed with the SEC and
distributed to the stockholders of the Company) as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors.
(c) From and after the time, if any, that Parent's designees constitute a
majority of the Company's Board of Directors and prior to the Effective Time,
any amendment of this Agreement materially adverse to the holders of the
Securities or any termination of this Agreement by the Company may be effected
only by the action of a majority of the Independent Directors of the Company,
which action shall be deemed to constitute the action of any committee
specifically designated by the Board of Directors of the Company to approve the
actions contemplated hereby and the full Board of Directors of the Company;
provided, that, if there shall be no Independent Directors, such actions may be
effected by majority vote of the entire Board of Directors of the Company.
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ARTICLE II
THE MERGER
Section 2.1. The Merger. Upon the terms and subject to the conditions
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hereof, and in accordance with the relevant provisions of the PBCL, Purchaser
shall be merged with and into the Company as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VII. Following the
Merger, the Company shall continue as the surviving corporation (the "Surviving
Corporation") under the name "Xxxxx Products Co." and shall continue its
existence under the laws of the Commonwealth of Pennsylvania, and the separate
corporate existence of Purchaser shall cease. At the election of Parent, any
direct or indirect wholly owned subsidiary of Parent may be substituted for
Purchaser as a constituent corporation in the Merger. Notwithstanding the
foregoing, Parent may elect at any time prior to the time that the notice of the
meeting of shareholders of the Company to consider approval of the Merger and
this Agreement (the "Shareholder Meeting") is first given to the Company's
shareholders that instead of merging Purchaser into the Company as hereinabove
provided, to merge the Company into Purchaser or another direct or indirect
wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized
under the laws of the Federal Republic of Germany; provided, however, that the
Company shall not be deemed to have breached any of its representations,
warranties or covenants herein solely by reason of such election. In such event
the parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing and to provide that Purchaser or such other subsidiary of
Parent shall be the Surviving Corporation and shall continue under the name
"Xxxxx Products Co."
Section 2.2. Effective Time. As soon as practicable after the satisfaction
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or waiver of the conditions set forth in Article VII, the parties hereto shall
cause the Merger to be consummated by filing articles of merger (the "Articles
of Merger") with the Department of State of the Commonwealth of Pennsylvania
(the "Department of State"), in such form as required by and executed in
accordance with the relevant provisions of the PBCL (the date and time of the
filing of the Articles of Merger with the Department of State (or such later
time as is specified in the Articles of Merger) being the "Effective Time").
Section 2.3. Effects of the Merger. The Merger shall have the effects set
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forth in the applicable provisions of the PBCL. Without limiting the generality
of the foregoing and subject thereto, at the Effective Time all the property,
rights, privileges, immunities, powers and franchises of the Company and
Purchaser shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Purchaser shall become the debts, liabilities and
duties of the Surviving Corporation.
Section 2.4. Articles of Incorporation; Bylaws. (a) At the Effective Time
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and without any further action on the part of the Company and Purchaser, the
Articles of Incorporation of the Company, as in effect immediately prior to the
Effective Time until thereafter further amended as provided therein and under
the PBCL, shall be the articles of incorporation of the Surviving Corporation
following the Merger.
(b) At the Effective Time and without any further action on
the part of the Company and Purchaser, the Bylaws of the Purchaser shall be the
Bylaws of the Surviving
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Corporation and thereafter may be amended or repealed in accordance with their
terms or the Articles of Incorporation of the Surviving Corporation and as
provided by law.
Section 2.5. Directors and Officers. The directors of Purchaser
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immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed (as the case may be) and qualified.
Section 2.6. Conversion of Securities. At the Effective Time, by virtue of
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the Merger and without any action on the part of Purchaser, the Company or the
holders of any of the following securities:
(a) Each share of common stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time shall
be converted into one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation.
(b) Each share of Company Common Stock and Company Preferred
Stock held in the treasury of the Company and each share of Company Common Stock
and Company Preferred Stock owned by Parent or Purchaser or any direct or
indirect subsidiary of the Company, Parent or Purchaser, in each case
immediately prior to the Effective Time, shall be cancelled and retired without
any conversion thereof and no payment or distribution shall be made with respect
thereto.
(c) Each issued and outstanding share of (i) Company Common
Stock (other than shares cancelled pursuant to Section 2.6(b) and any Dissenting
Shares (as defined in Section 2.7(a))) shall be converted into the right to
receive the Common Stock Price or any higher price that may be paid for shares
of Company Common Stock pursuant to the Offer and (ii) Company Preferred Stock
(other than those shares cancelled pursuant to Section 2.6(b) and any Dissenting
Shares) shall be converted into the right to receive the Preferred Stock Price
or any higher price that may be paid for shares of Company Preferred Stock
pursuant to the Offer (the "Merger Consideration") payable to the holder
thereof, in each case without interest, upon surrender of the certificate
formerly representing such share in the manner provided in Section 2.8, less any
required withholding taxes.
Section 2.7. Dissenting Shares. (a) Notwithstanding any provision of this
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Agreement to the contrary, any issued and outstanding Securities ("Dissenting
Shares") held by a Dissenting Shareholder (as defined below) shall not be
converted into the Merger Consideration but shall become the right to receive
such consideration as may be determined to be due to such Dissenting Shareholder
pursuant to the PBCL; provided, however, that each share of Company Common Stock
or Company Preferred Stock outstanding immediately prior to the Effective Time
and held by a Dissenting Shareholder who, after the Effective Time, loses his or
her right of appraisal, pursuant to the PBCL, shall be deemed to be converted as
of the Effective Time into the right to receive the Merger Consideration,
without any interest thereon. As used in this Agreement, the term "Dissenting
Shareholder" means any record holder or beneficial owner of
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shares of Company Common Stock or Company Preferred Stock who complies with all
provisions of the PBCL (including the provisions of Sections 1575 through 1580
and Section 1930 of the PBCL) concerning the right of holders of Company Common
Stock and Company Preferred Stock to dissent from the Merger and obtain fair
value for their shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal pursuant to the applicable provisions of the PBCL received
by the Company, withdrawals of such demands, and any other instruments served
pursuant to the PBCL and received by the Company and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demands for
appraisal under the PBCL. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to any such demands for
appraisal or offer to settle or settle any such demands.
Section 2.8. Surrender of Shares. (a) Prior to the earlier of the mailing
-------------------
of the Proxy Statement and the Effective Time, Parent shall appoint a bank or
trust company which is reasonably satisfactory to the Company to act as paying
agent (the "Paying Agent") for the payment of the Merger Consideration. When and
as needed, Parent shall cause the Surviving Corporation to deposit with the
Paying Agent for the benefit of former holders of Securities sufficient funds to
make all payments pursuant to this Section 2.8. Such funds shall be invested by
the Paying Agent as directed by the Surviving Corporation. Any net profit
resulting from, or interest or income produced by, such investments will be
payable to the Surviving Corporation or as it directs.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder, as of the Effective
Time, of an outstanding certificate or certificates which immediately prior to
the Effective Time represented Securities (the "Certificates"), a form of letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates for payment of the Merger Consideration therefor.
Upon surrender to the Paying Agent of a Certificate, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the aggregate amount of Merger Consideration into which the
number of Securities previously represented by such Certificate or Certificates
surrendered shall have been converted pursuant to this Agreement. If any Merger
Consideration is to be remitted to a person whose name is other than that in
which the Certificate for Securities surrendered for exchange is registered, it
shall be a condition of such exchange that the Certificate so surrendered shall
be properly endorsed, with signature guaranteed, or otherwise in proper form for
transfer, and that the person requesting such exchange shall have paid any
transfer and/or other taxes required by reason of the remittance of Merger
Consideration to a person whose name is other than that of the registered holder
of the Certificate surrendered, or the person requesting such exchange shall
have established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. No interest shall be paid or accrued,
upon the surrender of the Certificates, for the benefit of holders of the
Certificates on any Merger Consideration.
-9-
(c) At any time following six months after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds (including any interest received with respect thereto)
which had been deposited with the Paying Agent and which have not been disbursed
to holders of Certificates, and thereafter such holders shall be entitled to
look only to the Surviving Corporation (subject to abandoned property, escheat
or other similar laws) and only as general creditors thereof for payment of
their claim for Merger Consideration to which such holders may be entitled.
(d) Notwithstanding the provisions of Section 2.8(c), neither
the Surviving Corporation nor the Paying Agent shall be liable to any person in
respect of any Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any Certificates
representing Securities shall not have been surrendered prior to six months
after the Effective Time (or immediately prior to such earlier date on which any
Merger Consideration in respect of such Certificate would otherwise escheat to
or become the property of any governmental entity), any such cash shall, to the
extent permitted by applicable law, become the property of the Parent, free and
clear of all claims or interest of any person previously entitled thereto.
(e) Parent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any former holder
of Securities such amounts as Parent (or any affiliate thereof) is required to
deduct and withhold with respect to the making of such payment under the Code
(as defined herein), or any provision of any applicable state, local or foreign
law, rule or regulation. To the extent that amounts are so withheld by Parent
and paid by Parent to the applicable taxing authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
former holder of Securities in respect of which such deduction and withholding
was made by Parent.
Section 2.9. No Further Transfer or Ownership Rights. After the Effective
---------------------------------------
Time, there shall be no further transfer on the records of the Company (or the
Surviving Corporation) or its transfer agent of certificates representing
Securities which have been converted pursuant to this Agreement into the right
to receive Merger Consideration, and if such certificates are presented to the
Company for transfer, they shall be cancelled against delivery of the Merger
Consideration therefor. From and after the Effective Time, the holders of
Certificates evidencing ownership of Securities outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such
Securities except as otherwise provided for herein or by applicable law. All
Merger Consideration paid upon the surrender for exchange of Certificates
representing Securities in accordance with the terms of this Article II shall be
deemed to have been paid in full satisfaction of all rights pertaining to the
Securities exchanged for Merger Consideration theretofore represented by such
Certificates.
Section 2.10. Treatment of Options. Simultaneously with the execution of
--------------------
this Agreement, the Board of Directors of the Company (or, if appropriate, any
committee thereof) has adopted appropriate resolutions, and the Company hereby
agrees to take all other actions necessary after the date hereof, if any, to
provide that each outstanding stock option (each "Option") heretofore granted
under the Company's 1997 Non-Employee Directors' Equity Incentive Plan (the
"Directors' Plan") and the Company's 1994 Stock Option Plan (the "Management
Plan") (collectively, the "Company Stock Option Plans"), whether or not then
-10-
vested or exercisable, shall, at the Effective Time, be cancelled, and each
holder thereof shall be entitled to receive a payment in cash as provided in
Section 6.8 hereof (subject to any applicable withholding taxes, the "Cash
Payment"). As provided herein, the Company Stock Option Plans (and any feature
of any Benefit Plan or 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 shall terminate as of the Effective Time. The Company
will take all steps necessary to ensure that none of the Company or 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 the current
shareholders of Purchaser or its affiliates, to acquire any capital stock of the
Surviving Corporation or any of its subsidiaries or, to receive any payment in
respect thereof (except for Cash Payments to be made as provided in Section 6.8
hereof to holders of Options outstanding immediately prior to the Effective
Time) and to cause such Options to be cancelled or cause the holders of the
Options to agree to such cancellation thereof as provided herein.
Section 2.11. Closing. Upon the terms and subject to the conditions hereof,
-------
as soon as practicable after consummation of the Offer, and to the extent
required by the PBCL after the vote of the shareholders of the Company in favor
of the approval of the Merger and this Agreement has been obtained, the Company
and Purchaser (or Parent if appropriate) shall execute and file with the
Department of State the Articles of Merger, and the parties shall take all such
other and further actions as may be required by law to make the Merger
effective. Prior to the filing referred to in this Section 2.11, a closing (the
"Closing") will be held at the offices of Dechert Price & Xxxxxx, 4000 Xxxx
Atlantic Tower, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000-0000 (or such other
place as the parties may agree) for the purpose of confirming all of the
foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser as
follows:
Section 3.1. Organization and Qualification
------------------------------
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Pennsylvania
and has the requisite corporate power and authority and possesses all
governmental franchises and Permits (as defined herein) necessary to enable it
to own, lease and operate its properties and assets and to carry on its business
as it is now being conducted except where failure to possess such franchises and
Permits, individually or in the aggregate, has not had and could not reasonably
be expected to have a Material Adverse Effect on the Company. The Company is
duly qualified as a foreign corporation or licensed to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or leased or the nature of its activities makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed or in good
standing, individually or in the aggregate, has not had and could not reasonably
be expected to have a Material Adverse Effect on the Company.
-11-
(b) The only subsidiaries of the Company are those set forth
on Section 3.1(b) of the Company Disclosure Schedule. Each subsidiary of the
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the requisite
corporate power and authority and possesses all governmental franchises and
Permits necessary to enable it to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted except where
failure to possess such franchises and Permits, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect on the Company. Each subsidiary of the Company is duly qualified
as a foreign corporation or licensed to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed or in good standing,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Material Adverse Effect on the Company.
(c) All of the outstanding shares of capital stock of each
such subsidiary have been validly issued and are fully paid and non-assessable
and, except as set forth in Section 3.1(c) of the Company Disclosure Schedule,
are owned by the Company, by another wholly owned subsidiary of the Company or
by the Company and another such wholly owned subsidiary, free and clear of all
pledges, claims, equities, options, liens, charges, call rights, rights of first
refusal, "tag" or "drag" along rights, encumbrances and security interests of
any kind or nature whatsoever (collectively, "Liens"). Except for the capital
stock of its subsidiaries or as set forth on Section 3.1(c)(i) of the Company
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership,
limited liability company, joint venture or other entity. The Company has
delivered to Parent complete and correct copies of its Articles of Incorporation
and Bylaws and the comparable charters and bylaws or other organizational
documents of the subsidiaries set forth on Schedule 3.1(c)(ii) of the Company
Disclosure Schedule, in each case as amended to the date of this Agreement. The
Company represents that the subsidiaries of the Company other than those
subsidiaries listed on Schedule 3.1(c)(ii) of the Company Disclosure Schedule do
not have assets, revenues or income exceeding, 5% individually or 10% in the
aggregate, of the consolidated assets, revenues or income of the Company,
respectively (other than Xxxxx Products Co. (S) Pte. Ltd. (Singapore) with
respect to income so long as the income from such subsidiary does not exceed 12%
of the consolidated income of the Company), or otherwise conduct or have
material operations or businesses of the Company.
Section 3.2. Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
7,500,000 shares of Company Common Stock and 325,000 shares of preferred stock,
of which 176,000 shares of Company Preferred Stock are authorized. All of the
issued and outstanding Securities have been duly authorized and validly issued
and are fully paid and nonassessable and are not subject to preemptive rights.
As of the date hereof, 2,646,985 shares of Company Common Stock were issued and
outstanding, 175,950 shares of Company Preferred Stock were issued and
outstanding, 21,000 shares of Company Common Stock were reserved for issuance
pursuant to outstanding Options issued under the Directors Plan, and 625,060
shares of the Company Common Stock were reserved for issuance pursuant to
outstanding Options issued under the Management Plan. The Company Preferred
Stock entitles each holder to five votes per share and
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the Company Common Stock entitles each holder to one vote per share, in the
election of directors and all other corporate matters submitted to a
shareholders' vote, without voting separately by series or classes except as
otherwise required by law or by the Company's Articles of Incorporation or
Bylaws. Each share of Company Preferred Stock is convertible into 0.4 shares of
Company Common Stock at a conversion price of $2.50 per share of Company
Preferred Stock. The redemption price for the Company Preferred Stock is $1.05
per share. Such shares of Company Common Stock reserved for issuance under the
Company Stock Option Plans have not been issued and will not be issued prior to
the Effective Time, and no commitment has been or will be made for their
issuance, other than possible issuances under the Options described in the
preceding sentence and issued and outstanding under the Company Stock Option
Plans as of the date of this Agreement. Except as otherwise provided in Section
2.10 of this Agreement, at the Effective Time, each Option shall be cancelled
and the holder thereof shall not be entitled to receive any consideration
therefor other than the cash payments provided by Section 2.10 of this
Agreement. Section 3.2(a) of the Company Disclosure Schedule sets forth the
exercise prices and number of Securities in respect of outstanding Options under
the Company Stock Option Plans. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of the Company may vote ("Voting Company Debt"). Except as set
forth above, there are no outstanding securities, options, warrants, calls,
rights, convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights ("SARs"), stock-based performance units, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
of its subsidiaries is a party or by which any of them is bound obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of the Company or any of its subsidiaries or obligating the Company
or any of its subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, unit, commitment, agreement, arrangement
or undertaking. There are not any outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire,
or providing preemptive or registration rights (except as filed or incorporated
by reference as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "Company Form 10-K") and for the registration
rights provided for in the Tender and Option Agreement) with respect to, any
shares of, or any outstanding options, warrants or rights of any kind to acquire
any shares of, or any outstanding securities that are convertible into or
exchangeable for any shares of, capital stock of the Company or any of its
subsidiaries. The Company and its subsidiaries do not have outstanding any loans
to any person in respect of the purchase of securities issued by the Company and
its subsidiaries.
(b) There are no voting trusts, proxies or other agreements,
commitments or understandings of any character to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound with
respect to the voting of any shares of capital stock of the Company or any of
its subsidiaries or with respect to the registration of the offering, sale or
delivery of any shares of capital stock of the Company or any of its
subsidiaries under the Securities Act of 1933, as amended (the "Securities Act")
except for the registration rights agreement filed as an exhibit to the Company
Form 10-K and for the registration rights provided for in the Tender and Option
Agreement.
-13-
Section 3.3. Authority Relative to this Agreement.
------------------------------------
(a) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and each instrument required
hereby to be executed and delivered by the Company prior to or at the Effective
Time, to perform its obligations hereunder and thereunder, and to consummate the
Transactions (subject to the Company Shareholder Approval (as defined herein)
with respect to the Merger). The execution and delivery of this Agreement and
each instrument required hereby to be executed and delivered by the Company
prior to or at the Effective Time and the performance of its obligations
hereunder and thereunder and the consummation by the Company of the Transactions
have been duly and validly authorized by the Board of Directors of the Company
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than the
Company Shareholder Approval and the filing and recordation of appropriate
merger documents as required by the PBCL). This Agreement has been duly and
validly executed and delivered by the Company, and, assuming this Agreement
constitutes a valid and binding obligation of Parent and Purchaser, this
Agreement constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(b) The only vote of holders of any class or series of
capital stock of the Company or any of its subsidiaries necessary to adopt or
approve this Agreement and the Merger is the adoption and approval of this
Agreement and the Merger by the holders of a majority of the votes cast by the
holders of the Securities at the Shareholder Meeting voting together as a single
class, with each share of Company Common Stock entitled to one vote per share
and each share of Company Preferred Stock entitled to five votes per share (the
"Company Shareholder Approval"), subject to Section 6.9(c). The affirmative vote
of the holders of any capital stock or other securities (or any separate class
thereof) of the Company or any of its subsidiaries, or any of them, is not
necessary to consummate the Offer or any transaction contemplated by this
Agreement other than as set forth in the preceding sentence.
Section 3.4. Absence of Certain Changes. Except as set forth in Section
--------------------------
3.4 of the Company Disclosure Schedule, since December 31, 1998, the Company and
its subsidiaries have conducted their business only in the ordinary course, and
during such period there has not been any event, change, effect or development
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect on the Company, and the Company and its
subsidiaries are not aware of any event, change, effect or development which may
reasonably be expected to occur or exist that, individually or in the aggregate,
would have a Material Adverse Effect on the Company. Except as specifically
disclosed in the Company's filings and reports (including proxy statements)
under the Exchange Act filed since December 31, 1998 and publicly available
prior to the date of this Agreement (the "Filed Company SEC Documents") or as
set forth in Section 3.4 of the Company Disclosure Schedule, since December 31,
1998 there has not been (a) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of the Company or
any redemption or other acquisition by the Company of any capital stock of the
Company; (b) any entry into any agreement, commitment or transaction by the
Company or any of its subsidiaries which is material to the Company and its
subsidiaries taken as a whole, except agreements, commitments or transactions in
the ordinary course of business, consistent with prior practice; (c) any split,
combination or
-14-
reclassification of the Company's capital stock or of any other equity interests
in the Company, or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock or of any other equity interests in the Company; (d)(i) any
granting by the Company or any of its subsidiaries to any officer, director or
key employee of the Company or any of its subsidiaries of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent audited financial statements included in the Filed Company
SEC Documents, (ii) any granting by the Company or any of its subsidiaries to
any such officer, director or key employee of any increase in severance or
termination pay, except as was required under employment, severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the Filed Company SEC Documents or (iii) any
entry by the Company or any of its subsidiaries into any employment, severance
or termination agreement with any such officer, director or key employee; (e)
any damage, destruction or loss, whether or not covered by insurance, that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect on the Company; or (f) any change in accounting
methods, principles or practices by the Company or any subsidiary materially
affecting the consolidated assets, liabilities, results of operations or
business of the Company or its subsidiaries, except insofar as may have been
required by a change in generally accepted accounting principles.
Section 3.5. Reports. (a) Since January 1, 1996, the Company has timely
-------
filed all required forms, reports and documents with the SEC required to be
filed by it pursuant to the federal securities laws and the SEC rules and
regulations thereunder (collectively, the "Company SEC Documents"), all of which
have complied as of their respective filing dates in all material respects with
all applicable requirements of the Securities Act and the Exchange Act, and the
rules promulgated thereunder. The Company has delivered copies of all such
forms, reports or documents to Parent. None of such forms, reports or documents
at the time filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in any
Company SEC Document has been revised or superseded by a later-filed Company SEC
Document filed and publicly available prior to the date hereof, none of the
Company SEC Documents contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the Company SEC Documents (including the notes thereto) complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (and include, in the case of any unaudited interim financial statements,
reasonable accruals for normal year-end adjustments). No subsidiaries of the
Company are required to file periodic reports with the SEC under the Exchange
Act.
-15-
(b) Since January 1, 1996, the Company and its subsidiaries
have filed all reports required to be filed with any Governmental Entity other
than the SEC, including state securities administrators, except where the
failure to file any such reports of the Company and its subsidiaries,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Material Adverse Effect on the Company. Such reports of the
Company and its subsidiaries, including all those filed after the date of this
Agreement and prior to the Effective Time, were prepared in all material
respects in accordance with the requirements of applicable law.
Section 3.6. Proxy Statement. If a Proxy Statement is required for the
---------------
consummation of the Merger under applicable law, the Proxy Statement will comply
in all material respects with the Exchange Act, except that no representation is
made by the Company with respect to information supplied by or on behalf of
Parent or any affiliate of Parent specifically for inclusion in the Proxy
Statement. None of the information supplied by the Company specifically for
inclusion in the Proxy Statement shall, at the time the Proxy Statement is
mailed or at the time of the Shareholder Meeting or at the Effective Time,
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; provided however that the Company makes no representation or
warranty as to any of the information relating to and supplied by or on behalf
of Parent and Purchaser specifically for inclusion in the Proxy Statement. The
letter to shareholders, notice of meeting, proxy statement and form of proxy, or
the information statement, as the case may be, to be distributed to shareholders
in connection with the Merger, or any schedule required to be filed by the
Company with the SEC in connection therewith, together with any amendments or
supplements thereto, are collectively referred to herein as the "Proxy
Statement." If, at any time prior to the Effective Time, any event relating to
the Company or any of its affiliates, officers or directors is discovered by the
Company that should be set forth in a supplement to the Proxy Statement, the
Company will promptly inform Parent and Purchaser and prepare, file and
disseminate such supplement as may be required by applicable law.
Section 3.7. Consents and Approvals; No Violation. Subject to obtaining the
------------------------------------
Company Shareholder Approval (if required under the PBCL) and the taking of the
actions described in the immediately succeeding sentence, the execution,
delivery and performance of this Agreement do not, and the consummation of the
Transactions (including the changes in ownership of Securities or the
composition of the Board of Directors of the Company) and compliance with the
provisions of this Agreement will not, conflict with, or result in any violation
of, or default (with or without notice or lapse to time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a material benefit under, or result in the creation of any Lien upon
any of the material properties or assets of the Company or any of its
subsidiaries under, or result in the termination of, or require that any consent
be obtained or any notice be given with respect to, (i) the Articles of
Incorporation or Bylaws of the Company or the comparable charter or
organizational documents of any of its subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, license or other agreement,
instrument, Contract or Permit applicable to the Company or any of its
subsidiaries or their respective properties or assets, (iii) any judgment,
order, writ, injunction, decree, law, statute, ordinance, rule or regulation
applicable to the Company or any of its subsidiaries or their respective
properties or assets or (iv) material license, sublicense, consent or
-16-
other agreement (whether written or otherwise) pertaining to Intellectual
Property (as defined herein) used by the Company in the conduct of its business,
and by which the Company licenses or otherwise authorizes a third party to use
any Intellectual Property (the "Licenses"), other than, in the case of clauses
(ii), (iii) or (iv), any such conflicts, violations, defaults, rights, Liens,
losses of a material benefit, consents or notices that, (x) individually or in
the aggregate, have not and could not reasonably be expected to have a Material
Adverse Effect on the Company or (y) have been set forth on Schedule 3.7 of the
Company Disclosure Schedule. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, state or local government
or any court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a "Governmental Entity")
is required by the Company or any of its subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the Transactions, except for (i) the filing of a premerger
notification and report form by the Company under the Xxxx-Xxxxx- Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or filings and
consents under applicable foreign law, including, without limitation, the
antitrust laws or laws intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade and any filings
and consents which may be required by any foreign environmental, health or
safety laws or regulations pertaining to any notification, disclosure or
required approval triggered by the Merger or the Transactions, (ii) the filing
with the SEC of (x) the Schedule 14D-9, (y) if required, the Proxy Statement
relating to the approval by the Company's shareholders of this Agreement and (z)
such reports under Section 13(a) of the Exchange Act as may be required in
connection with this Agreement and the Transactions contemplated by this
Agreement, (iii) the filing of the Articles of Merger pursuant to the PBCL and
(iv) such consents, approvals, orders, authorizations, registrations,
declarations or filings which, individually or in the aggregate, have not had
and could not be reasonably expected to have a Material Adverse Effect on the
Company.
Section 3.8. Brokerage Fees and Commissions. Except for those fees and
------------------------------
expenses payable to Xxxxxxxx Xxxxx and to the Company's financial advisor,
Xxxxxx XxxXxxxx Xxxxx & Co., LLC ("Xxxxxx XxxXxxxx") pursuant to the letter
agreements, dated November 19, 1999 and November 12, 1999 respectively, and any
amendments or supplements thereto, no person is entitled to receive any
investment banking, brokerage or finder's fee or commission in connection with
this Agreement or the Transactions based upon arrangements made by or on behalf
of the Company or any of its subsidiaries or by any affiliate of the Company or
any of its subsidiaries. A copy of the above agreements and any amendments or
supplements thereto have previously been delivered to Parent. The estimated fees
and expenses incurred and to be incurred by the Company for counsel,
accountants, investment bankers, financial printers, experts and consultants in
connection with this Agreement and the Transactions are set forth in Section 3.8
of the Company Disclosure Schedule.
Section 3.9. Schedule 14D-9; Offer Documents. Neither the Schedule 14D-9,
-------------------------------
any other document required to be filed by the Company with the SEC in
connection with the Transactions, nor any information supplied by the Company in
writing for inclusion in the Offer Documents or the Schedule 14D-1 shall, at the
respective times the Schedule 14D-9, any such of other filings by the Company,
the Schedule 14D-1, the Offer Documents or any amendments or supplements thereto
are filed with the SEC or are first published, sent or given to stockholders of
the Company, as the case may be, contain any untrue statement of a material fact
or omit to state
-17-
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The Schedule 14D-9 and any other document required to be filed
by the Company with the SEC in connection with the Transactions will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by or on
behalf of Parent or Purchaser specifically for inclusion or incorporation by
reference therein.
Section 3.10. Litigation. Except as disclosed in Section 3.10 of the
----------
Company Disclosure Schedule, there is no claim, suit, action or proceeding
(including arbitration proceedings) pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries that, individually or
in the aggregate, has since December 31, 1998 had or could reasonably be
expected to have a Material Adverse Effect on the Company, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries which,
individually or in the aggregate, has since December 31, 1998 had or could
reasonably be expected to have a Material Adverse Effect on the Company. The
most recent financial statements contained in the Filed Company SEC Documents
reflect an adequate reserve for all claims, suits, actions, proceedings,
judgment, decrees, injunctions, rules or orders pending or threatened against
the Company or any of its subsidiaries through the date of such financial
statements.
Section 3.11. Absence of Changes in Benefit Plans. Except as disclosed in
-----------------------------------
Section 3.11 of the Company Disclosure Schedule, or as contemplated in Section
2.10 and Section 6.8 of this Agreement or as required by applicable law, since
January 1, 1998, there has not been any adoption or amendment in any material
respect by the Company or any of its subsidiaries of any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee,
officer or director of the Company or any of its subsidiaries or for which the
Company or any of its subsidiaries is liable. Except as filed or incorporated by
reference as an exhibit to the Company Form 10-K or disclosed in Section 3.11 of
the Company Disclosure Schedule, there exist no employment, consulting,
severance, termination or indemnification agreements, arrangements or
understandings between either of the Company or any of its subsidiaries and any
current or former officer or director of either of the Company or any of its
subsidiaries or for which either of the Company or any of its subsidiaries is
liable.
Section 3.12. ERISA Compliance. (a) Section 3.12(a) of the Company
---------------
Disclosure Schedule sets forth a complete list of all "employee benefit plans"
(as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") including without limitation, all "multiemployer
pension plans" as defined in Section 3(37) of ERISA), employment contracts,
bonus, pension, profit sharing, deferred compensation, incentive compensation,
excess benefit, stock, stock option, severance, termination pay, change in
control or other employee benefit plans, programs or arrangements, including,
but not limited to, those providing medical, dental, vision, disability, life
insurance and vacation benefits (other than those required to be maintained by
law), whether written or unwritten, qualified or unqualified,
-18-
funded or unfunded, foreign or domestic currently maintained, or contributed to,
or required to be maintained or contributed to, by the Company or any other
person or entity that, together with the Company, is treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code") (each an "ERISA Affiliate") for the benefit of any current or former
employees, officers or directors of the Company or any of its subsidiaries or
with respect to which the Company or any of its subsidiaries has any liability
(collectively, the "Benefit Plans"). As applicable with respect to each Benefit
Plan, the Company has delivered to Purchaser, true and complete copies of (i)
each Benefit Plan, including all amendments thereto, and in the case of an
unwritten Benefit Plan, a written description thereof, (ii) all trust documents,
investment management contracts, custodial agreements and insurance contracts
relating thereto, (iii) the current summary plan description and each summary of
material modifications thereto, (iv) the three most recent annual reports (Form
5500 and all schedules thereto) filed with the Internal Revenue Service ("IRS"),
(v) the most recent IRS determination letter and each currently pending
application to the IRS for a determination letter, (vi) the three most recent
summary annual reports, financial statements and trustee reports, and (vii) all
records, notices and filing concerning IRS or Department of Labor audits or
investigations, "prohibited transactions" within the meaning of Section 406 of
ERISA or Section 4975 of the Code and "reportable events" within the meaning of
Section 4043 of ERISA.
(b) No event has occurred and, to the knowledge of the Company, there
exists no condition or set of circumstances in connection with which the Company
or any ERISA Affiliate could be subject to any liability under the terms of any
Benefit Plan, under ERISA, or, with respect to any Benefit Plan, under the Code
or any other applicable law, rule or regulation, domestic or foreign, other than
any condition or set of circumstances that, individually or in the aggregate has
not had and could not reasonably be expected to have a Material Adverse Effect
on the Company. Neither the Company nor any ERISA Affiliate has incurred or
would reasonably be expected to incur any liability in respect of any employee
benefit plan maintained by an ERISA Affiliate but not included within the term
"Benefit Plan" or by any person other than the Company or any ERISA Affiliate.
Each of the Benefit Plans has been administered in compliance with its terms and
all applicable laws. All contributions that are required to be made by the
Company or any ERISA Affiliate to any Benefit Plan have been made.
(c) The Benefit Plans which are "employee pension benefit plans" within the
meaning of Section 3(2) of ERISA and which are intended to meet the
qualification requirements of Section 401(a) of the Code (each a "Pension Plan")
now meet, and at all times since their inception have met the requirements for
such qualification, and the related trusts are now, and at all times since their
inception have been, exempt from taxation under Section 501(a) of the Code. All
Pension Plans have received determination letters from the IRS to the effect
that such Pension Plans are qualified and the related trusts are exempt from
federal income taxes and no determination letter with respect to any Pension
Plan has been revoked nor, to the best knowledge of the Company is there any
reason for such revocation, nor has any Pension Plan been amended, or failed to
be amended, since the date of its most recent determination letter in any
respect which would adversely affect its qualification. The Company has
furnished to Buyer the three most recent actuarial reports with respect to each
Benefit Plan that is a defined benefit pension plan, as defined by Section 3(35)
of ERISA. The information supplied to the actuary by the Company and its ERISA
Affiliates for use in preparing those reports was complete and accurate.
-19-
The conclusions expressed in those reports are complete and correct in all
material respects. No event has occurred since the date of the most recent such
actuarial report that had, or is likely to have, a materially adverse effect on
the ratio of plan assets to the actuarial present value of plan obligations for
accumulated benefits shown in such report.
(d) Section 3.12(d) of the Company Disclosure Schedule lists: (1) the
excess of the liabilities, determined using the accumulated benefit obligation
methodology of Statement of Financial Accounting Standards No. 87, of any
Benefit Plan subject to Title IV of ERISA over the fair market value of such
Benefit Plan's assets (2) the amount of any unfunded deferred compensation and
(3) the actuarially determined present value of any obligation to provide
retiree medical or life insurance benefits determined in accordance with
Statement of Financial Accounting Standard No. 106. For the purposes of this
Section 3.12(d) unfunded liabilities and projected costs have been determined by
the Company and its actuaries using actuarial methods and assumptions that are,
singly and in the aggregate, reasonable taking into account circumstances known
to them on the date of this Agreement, and, except as adjusted to satisfy the
requirements that such assumptions be reasonable, consistent with prior
practice.
(e) Multiemployer Plans.
(i) Section 3.12(e)(i) of the Company Disclosure Schedule lists each
Benefit Plan that is a multiemployer pension plan.
(ii) All required contributions, withdrawal liability payments or
other payments of any type that the Company or any ERISA Affiliate have been
obligated to make to any multiemployer pension plan have been duly and timely
made. Any withdrawal liability incurred with respect to any multiemployer
pension plan has been fully paid as of the date hereof.
(iii) Neither the Company nor any ERISA Affiliate has undertaken any
course of action that could reasonably be expected to lead to a complete or
partial withdrawal from any multiemployer pension plan.
(iv) Neither the Company nor any ERISA Affiliate is subject to any
liability, contingent or accrued, arising out of a transaction described in
Section 4204 of ERISA.
(v) Set forth next to each multiemployer pension plan listed on
Schedule 3.12(e)(i) of the Company Disclosure Schedule, is the amount of the
withdrawal liability that would be incurred by the Company or any ERISA
Affiliate with respect to such plan, under Section 4201 of ERISA, if the Company
or any ERISA Affiliate were to completely withdraw from such multiemployer
pension plan on the date hereof.
(f) Except as set forth on Section 3.12(f) of the Company Disclosure
Schedule, the execution and delivery of this Agreement do not, and the
consummation of the Transactions will not (i) require the Company, any ERISA
Affiliate or any of the Company's subsidiaries to pay greater compensation or
make a larger contribution to, or pay greater benefits or accelerate payment or
vesting of a benefit under, any Benefit Plan or any other program,
-20-
agreement, policy or arrangement or (ii) create or give rise to any additional
vested rights or service credits under any Benefit Plan or any other program,
agreement, policy or arrangement.
(g) Except as set forth in Section 3.12(g) of the Company Disclosure
Schedule, neither the Company nor any ERISA Affiliate or any of the Company's
subsidiaries is a party to or is bound by any severance agreement, program or
policy.
(h) Except as set forth in Section 3.12(h) of the Company Disclosure
Schedule, no Benefit Plan provides benefits, including without limitation, death
or medical benefits, beyond termination of employment or retirement other than
(i) coverage mandated by law or (ii) death or retirement benefits under a
Benefit Plan qualified under Section 401(a) of the Code. Neither the Company nor
any ERISA Affiliate or any of the Company's subsidiaries is contractually or
otherwise obligated (whether or not in writing) to provide any person with life,
medical, dental or disability benefits for any period of time beyond retirement
or termination of employment, other than as required by the provisions of
Sections 601 through 608 of ERISA and Section 4980B of the Code.
(i) With respect to any Benefit Plan that is an employee welfare benefit
plan (as defined in Section 3(1) of ERISA), (i) no such Benefit Plan in funded
through a "welfare benefit fund", as such term is defined in Section 419(e) of
the Code, (ii) each such Benefit Plan that is a "group health plan", as such
term is defined in Section 5000(b)(l) of the Code, complies in all material
respects with the applicable requirements of Sections 601 through 608 of ERISA
and Section 4980B(f) of the Code, and (iii) each such Benefit Plan (including
any such Plan covering retirees or other former employees) may be amended or
terminated without material liability to the Company or any ERISA Affiliate or
any of the Company's subsidiaries on or at any time after the consummation of
the Offer.
(j) Except as set forth in Schedule 3.12(a) of the Company Disclosure
Schedule, there is no material pension, welfare, bonus, stock purchase, stock
ownership, stock option, deferred compensation, incentive, severance,
termination or other compensation plan or arrangement, or other material
employee fringe benefit plan presently maintained by, or contributed to by the
Company, or any ERISA Affiliate which is for the benefit of any employee of the
Company or any ERISA Affiliate, including any such plan required to be
maintained or contributed to by the law of the relevant jurisdiction, maintained
outside the jurisdiction of the United States.
(k) The Company and its subsidiaries have not incurred any liability under,
and have complied in all respects with, the Worker Adjustment Retraining
Notification Act and the regulations promulgated thereunder (the "WARN Act") and
do not reasonably expect to incur any such liability as a result of actions
taken or not taken prior to the Effective Time. Section 3.12(k) of the Company
Disclosure Schedule lists (i) all the employees terminated or laid off by the
Company and its subsidiaries during the 90 days prior to the date hereof and
(ii) all the employees of the Company or its subsidiaries who have experienced a
reduction in hours of work of more than 50% (other than voluntary reductions in
hours per week) during any month during the 90 days prior to the date hereof and
describes all notices given by the Company and its subsidiaries in connection
with the WARN Act.
-21-
Section 3.13. Taxes. (a) (i) All federal income Tax Returns and all other
-----
material Tax Returns (as defined herein) that are required to be filed by or
with respect to the Company or any of its subsidiaries have been timely filed,
and all such Tax Returns are true, complete and accurate in all material
respects and correctly reflect the income, or other measure of Tax (as defined
herein), required to be shown thereon in all material respects, (ii) except as
disclosed in Section 3.13(a)(ii) of the Company Disclosure Schedule, all Taxes
that are due have been paid in full, and (iii) the most recent financial
statements contained in the Filed Company SEC Documents reflect an adequate
reserve for all Taxes of the Company and its subsidiaries for all taxable
periods and portions thereof through the date of such financial statements.
(b) Except as set forth in Section 3.13(b) of the Company Disclosure
Schedule, no material Tax Return of the Company or any of its subsidiaries is
under audit or examination by any taxing authority, and no written notice of
such an audit or examination has been received by the Company or a subsidiary.
(c) Except as set forth in Section 3.13(c) of the Company Disclosure
Schedule, there is not in force any extension of time with respect to the due
date for the filing of any Tax Return or any waiver or agreement for any
extension of time for the assessment or payment of any Tax due with respect to
the period covered by any Tax Return.
(d) Except as set forth in Section 3.13(d) of the Company Disclosure
Schedule, there is no material issue raised or claim against the Company or any
of its subsidiaries for any Taxes, and no assessments, deficiency or adjustment
has been asserted or proposed with respect to any Tax Return and no material
issues relating to Taxes were raised in writing by a taxing authority in a
completed audit or examination that can reasonably be expected to recur in a
later taxable period.
(e) Except as set forth in Section 3.13(e) of the Company Disclosure
Schedule, since January 1, 1993, none of the Company and its subsidiaries, has
been a member of an affiliated group filing a consolidated federal income Tax
Return other than the affiliated group of which the Company is the common parent
corporation.
(f) There are no material Liens for Taxes on the assets of the Company or
any of its subsidiaries.
(g) Except as set forth in Section 3.13(g) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is bound by any tax
sharing, tax indemnity or similar agreement with respect to Taxes.
As used herein, "Tax Returns" shall mean all returns and reports of or
-----------
with respect to any Tax which are required to be filed by or with respect to the
Company or any of its subsidiaries, and "Taxes" shall mean (i) all taxes,
charges, imposts, tariffs, fees, levies or other similar assessments or
liabilities, including income taxes, ad valorem taxes, excise taxes, withholding
taxes, stamp taxes or other taxes of or with respect to gross receipts,
premiums, real property, personal property, windfall profits, sales, use,
transfers, licensing, employment, payroll and franchises imposed by or under any
statute, law, rule or regulation, and such terms shall include any interest,
fines, penalties, assessments or additions to tax resulting from, attributable
-22-
to or incurred in connection with any such tax or any contest or dispute
thereof; (ii) liability of the Company or any fiduciary for the payment of any
amounts of the type described in clause (i) as a result of being a member of an
affiliated, combined consolidated or unitary group for any taxable period and
(iii) liability of the Company or any subsidiary for the payment of any amounts
of the type described in clauses (i) or (ii) as a result of any express or
implied obligation to indemnify any other person.
Section 3.14. No Excess Parachute Payments; Termination Payments; Section
-----------------------------------------------------------
162(m) of the Code. Except as set forth in Section 3.14 of the Company
------------------
Disclosure Schedule, any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of either of
the Company or any of their affiliates who is a "disqualified individual" (as is
defined in proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or Benefit
Plan would not be characterized as an "excess parachute payment" (as is defined
in Section 280G(b)(1) of the Code). Except as set forth in Section 3.14 of the
Company Disclosure Schedule, there are no payments that the Company or any of
its subsidiaries, or the Surviving Corporation is or would be required to make
to any of the Company's current or former employees or to any third party which
payment is contingent upon a change of control of the Company or any of its
subsidiaries or payable as a result of the Transactions, including, without
limitation, the termination of any of the Company's or any of its subsidiaries'
employees after the Effective Time. The disallowance of a deduction under
Section 162(m) of the Code for employee remuneration will not apply to any
amount paid or payable by the Company or any of its subsidiaries under any
commitment, program, arrangement or understanding.
Section 3.15. Compliance with Applicable Laws. Except for any of the
-------------------------------
following which, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect on the Company or which
are otherwise specifically disclosed in the Filed Company SEC Documents or set
forth on Section 3.15 of the Company Disclosure Statement:
(a) To the Company's knowledge, the Company and its subsidiaries has in
effect all Federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises, licenses, notices, permits
(including Environmental Permits (as defined herein)) and rights ("Permits")
necessary for it to own, lease or operate its properties and assets and to carry
on its business as now conducted, and there has occurred no default under any
such Permit. Each of the Company and its subsidiaries is in compliance with all
applicable statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity. "Environmental Permit" means any permit, license, approval
or other authorization issued under any applicable law, regulation and other
requirement of any country, state, municipality or other subdivision thereof
relating to pollution or protection of health or the environment, including
laws, regulations or other requirements relating to emissions, discharges,
releases of pollutants, contaminants, hazardous substances, toxic materials, or
wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment storage,
disposal, transport, or handling of chemical substances, pollutants,
contaminants or hazardous or toxic materials or wastes.
-23-
(b) To the Company's knowledge, each of the Company and its subsidiaries
and their respective properties, assets, businesses and operations is, and has
been, and each of the Company's former subsidiaries, while subsidiaries of the
Company and their respective properties, assets, businesses and operations, was,
in compliance with all applicable Environmental Laws (as defined herein) and
Environmental Permits. The term "Environmental Laws" means any federal, state,
local or foreign statute, code, ordinance, rule, regulation, policy, guideline,
permit, consent, approval, license, judgment, order, writ, decree, injunction or
other authorization, including the requirement to register underground storage
tanks, relating to: (i) emissions, discharges, releases or threatened releases
of Hazardous Material (as defined herein) into the environment, including,
without limitation, into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, groundwater, publicly-owned
treatment works, septic systems or land; or (ii) the generation, treatment,
storage, recycling, disposal, use, handling, manufacturing, transportation or
shipment of Hazardous Material; including without limitation, the following
statutes, their implementing regulations and any state corollaries: the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act, 42 U.S.C. Section 9601 et
seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq. and the Clean Air Act, 42 U.S.C.
Section 7401 et seq.
(c) To the Company's knowledge, during the period of ownership or operation
by the Company and its subsidiaries of any of their respective current or
previously-owned or operated properties, there have been no Releases (as defined
herein) of Hazardous Material in, on, under, or from such properties which has
contaminated such properties or any surrounding site or any off-site location.
To the Company's knowledge, prior to the period of ownership or operation by the
Company and its subsidiaries of any of their respective current or
previously-owned or operated properties there were no releases of Hazardous
Material in, on or from such properties which has contaminated any such property
or any surrounding site or any off-site location. "Hazardous Materials" means
(l) hazardous materials, pollutants or contaminants, medical, hazardous or
infectious wastes, hazardous waste constituents, hazardous chemicals, hazardous
or toxic pollutants, and hazardous or toxic substances as those terms are
defined in or regulated by any Environmental Law, (2) petroleum, including crude
oil and any fractions thereof, (3) natural gas, synthetic gas and any mixtures
thereof, (4) radioactive materials including, without limitation, source
byproduct or special nuclear materials and (5) pesticides. "Releases" means
spills, leaks, discharges, disposal, pumping, pouring, emissions, injection,
emptying, leaching, dumping or allowing to escape.
(d) To the Company's knowledge, the Company and its subsidiaries and their
respective properties, assets, businesses and operations are not subject to any
Environmental Claims (direct or contingent) or Environmental Liabilities (as
such terms are defined herein) arising from or based upon any act, omission,
event, condition or circumstance occurring or existing on or prior to the date
hereof or for which the Company and its subsidiaries are responsible, including
without limitation, any such Environmental Claims or Environmental Liabilities
arising from or based upon the ownership or operation of assets, businesses or
properties of the Company or any subsidiary or their respective predecessors,
and (ii) neither the Company nor any of its subsidiaries has received any notice
of any violation of any
-24-
Environmental Law or Environmental Permit or any Environmental Claim in
connection with their respective assets, properties, businesses or operations,
or, in each case, those of their respective predecessors. Without regard to the
potential for a Material Adverse Effect on the Company, the Company has provided
to Purchaser and has disclosed on Section 3.15(d) of the Company Disclosure
Schedule all material environmental assessment reports prepared by, on behalf of
or, to the extent in the Company's or any subsidiary's possession or contract,
relating to the Company or any subsidiary since January 1, 1993 regarding the
environmental condition of the Company's properties or the environmental
compliance of the Company or any subsidiary. The term "Environmental Claim"
means any third party (including governmental agencies, regulatory agencies,
employees or other private parties) action, lawsuit, claim, investigation
proceeding (including claims or proceedings under the Occupational Safety and
Health Act or similar laws relating to safety of employees) which seeks to
impose liability for (i) noise; (ii) pollution or contamination of the air,
surface water, ground water, land or structure; (iii) solid (including
hazardous, waste), gaseous or liquid waste (including hazardous waste)
generation, handling, treatment, storage, disposal or transportation; (iv)
exposure to hazardous or toxic substances; (v) the safety or health of
employees; or (vi) the manufacture, processing, distribution in commerce, use,
or storage of chemical or other Hazardous Materials. An "Environmental Claim"
includes, but is not limited, to, a common law action, as well as a proceeding
to issue, modify or terminate an Environmental Permit of the Company or any of
its subsidiaries, or to adopt or amend a regulation to the extent that such a
proceeding attempts to redress violations of such an Environmental Permit as
alleged by a federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority. The term "Environmental
Liabilities" includes all costs arising from any Environmental Claim or
violation or alleged violation or circumstance or condition which would give
rise to a violation or liability under any Environmental Permit or Environmental
Law under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property, and any other related costs, expenses, losses,
damages, penalties, fines, liabilities and obligations, including reasonable
attorney's fees and court costs.
(e) Notwithstanding anything to the contrary in this Agreement, neither the
Company nor Purchaser is required to: (i) with respect to the Plainville
Property (as defined herein), file any forms (other than as may be required
under the Connecticut Property Transfer Law) or (ii) with respect to any other
properties or assets owned, leased or operated by the Company, obtain any
consent, order, authorization or approval of, or make any registration,
declaration or filing with, any Governmental Entity under any Environmental Law
as a result of or in connection with the execution and delivery of this
Agreement or the consummation by the Company of the Transactions.
Section 3.16. State Takeover Statutes. The Company has taken all action
-----------------------
necessary to render the provisions of any anti-takeover statute, rule or
regulation that to the Company's knowledge may be applicable to the Transactions
(including Sections 2538 through 2588, inclusive, of the PBCL) inapplicable to
Parent, Purchaser and their respective affiliates, and to the Offer, the Merger
and the Tender and Option Agreement and this Agreement and the other
Transactions. The Board of Directors of the Company has approved the Merger and
the Tender and Option Agreement and this Agreement and the other Transactions.
Except for an exemptive filing under the Pennsylvania Takeover Disclosure Law,
no Pennsylvania anti-takeover statute,
-25-
rule or regulation (other than Sections 1921 through 1930 of the PBCL and
provisions of the PBCL generally applicable to the powers of a corporation and
the duties and powers of its board of directors in a takeover context, including
Sections 1502(a)(18), 1525(b), 1715 and 2513) is applicable to the Transactions,
including the Merger. To the Company's knowledge, no other "fair price,"
"moratorium," "control share acquisition," "business combination," or other
state takeover statute or similar statute or regulation applies or purports to
apply to the Company, Parent, Purchaser, affiliates of Parent or Purchaser, the
Offer, the Merger, the Tender and Option Agreement, this Agreement, or any of
the other Transactions based upon the Company's operations. As a result of the
foregoing actions, the only corporate action required to authorize the Merger is
the Company Shareholder Approval and no further action is required to authorize
the other Transactions.
Section 3.17. Contracts. Section 3.17 to the Company Disclosure Schedule
---------
lists, under the relevant heading, all oral or written contracts, agreements,
arrangements, guarantees, licenses, leases and executory commitments (each a
"Contract"), other than Benefit Plans, agreements disclosed on Section 3.11 to
the Company Disclosure Schedule and any Contracts heretofore filed as an exhibit
to any Filed Company SEC Document, that exist as of the date hereof to which the
Company or any of its subsidiaries is a party or by which it is bound and which
fall within any of the following categories: (a) Contracts not entered into in
the ordinary course of the Company's and its subsidiaries' businesses other than
those that individually or in the aggregate are not material to the business of
the Company and its subsidiaries, taken as a whole, (b) joint venture and
partnership agreements, (c) Contracts containing covenants purporting to limit
the freedom of the Company or any of its subsidiaries to compete in any line of
business in any geographic area or to hire any individual or group of
individuals, (d) Contracts which after the consummation of any of the
Transactions would have the effect of limiting the freedom of Parent or any of
its subsidiaries to compete in any line of business in any geographic area or to
hire any individual or group of individuals, (e) Contracts which contain minimum
purchase conditions in excess of $100,000 with respect to inventory purchases
for resale, and $100,000 in the case of everything else, or requirements or
other terms that restrict or limit the purchasing or distribution relationships
of the Company or its affiliates (including after consummation of any of the
Transactions), Parent or any of its affiliates, or any customer, licensee or
lessee thereof, (f) Contracts relating to any outstanding commitment for capital
expenditures in excess of $50,000, (g) indentures, mortgages, promissory notes,
loan agreements or guarantees of borrowed money, letters of credit or other
agreements or instruments of the Company or its subsidiaries or commitments for
the borrowing or the lending by the Company of amounts in excess of $100,000 in
the aggregate or providing for the creation of any charge, security interest,
encumbrance or lien upon any of the assets of the Company with an aggregate
value in excess of $100,000, (h) Contracts providing for "earn-outs" or other
contingent payments by the Company involving more than $100,000 per contract
over the terms of all such Contracts, (i) Contracts associated with off balance
sheet financing in excess of $100,000 in the aggregate, including but not
limited to arrangements for the sale of receivables, (j) Licenses, (k) stock
purchase agreements, asset purchase agreements or other acquisition or
divestiture agreements where the consideration in any individual transaction
exceeds $100,000 since January 1, 1998, (l) material Contracts with respect to
which a change in the ownership (whether directly or indirectly) of the
Securities or the composition of the Board of Directors of the Company may
result in a violation of or default under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of benefits
under such Contract or (m) any
-26-
other agreement which is material to the Company, irrespective of amount. All
Contracts to which the Company or any subsidiary is a party or by which it is
bound are valid and binding obligations of the Company or such subsidiary and,
to the knowledge of the Company, the valid and binding obligation of each other
party thereto except such Contracts which if not so valid and binding could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. Neither the Company nor, to the knowledge of the
Company, any other party thereto is in violation of or in default in respect of,
nor has there occurred an event or condition which with the passage of time or
giving of notice (or both) would constitute a default under or permit the
termination of, any such Contract except such violations or defaults under or
terminations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company. Set forth in Section
3.17(n) to the Company Disclosure Schedule is the amount of the annual premium
currently paid by the Company for its directors' and officers' liability
insurance. The Company has delivered true and correct copies of the Contracts
and Licenses set forth on Section 3.17(o) to the Company Disclosure Schedule and
the waivers and consents thereto as are necessary to provide that the
consummation of the transactions contemplated by this Agreement will not have
any affect on the Company's rights or obligations under such Contracts or
Licenses or conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or result in the creation of any Lien upon any of the
material properties or assets of the Company or any subsidiaries under, or
result in the termination of such Contracts or Licenses.
Section 3.18. Labor Matters. Except to the extent set forth in Section 3.18
-------------
of the Company Disclosure Schedule, (a) no employee of the Company or any of its
subsidiaries is represented by any union or other labor organization; (b) the
Company and all of its subsidiaries are in material compliance with applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, and are not engaged in any unfair labor
practice; (c) there is no unfair labor practice complaint against the Company or
any of its subsidiaries pending or, to the knowledge of the Company, threatened
by or before the National Labor Relations Board or any other Governmental
Entity; (d) there is no labor strike, material dispute, material slowdown,
representation campaign or work stoppage pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its subsidiaries;
(e) no grievance or arbitration proceeding arising out of or under collective
bargaining agreements is pending and no claim therefor has been asserted against
the Company or its subsidiaries; and (f) neither the Company or any of its
subsidiaries has experienced any material work stoppage since January 1, 1998.
The Company and its subsidiaries are in material compliance with all applicable
federal, state, local or foreign labor laws, rule and regulations.
Section 3.19. Title to Properties. (a) The Company and its subsidiaries
-------------------
have good, valid and marketable title to, or valid leasehold interests in, all
their material tangible properties and assets except for such as are no longer
used or useful in the conduct of their respective businesses or as have been
disposed of in the ordinary course of business and except for defects in title,
easements, restrictive covenants and similar encumbrances or impediments that,
in the aggregate, do not and will not materially interfere with their ability to
conduct their respective businesses as currently conducted or are otherwise set
forth on Section 3.19 of the Company Disclosure Statement. All such material
properties and assets, other than properties and assets in
-27-
which the Company or any of its subsidiaries has leasehold interests, are free
and clear of all Liens, except for Liens that, individually or in the aggregate,
do not and will not materially interfere with the ability of the Company and its
subsidiaries to conduct their respective businesses substantially as currently
conducted. Section 3.19(a) of the Company Disclosure Schedule sets forth the
addresses of the real property owned by the Company and its subsidiaries.
(b) The Company and each of its subsidiaries has complied in all material
respects with the terms of all material leases to which it is a party and under
which it is in occupancy, and all such leases are in full force and effect. The
Company and each of its subsidiaries enjoy peaceful and undisturbed possession
under all such material leases.
Section 3.20. Undisclosed Liabilities. To the Company's knowledge, except
-----------------------
as and to the extent specifically disclosed in the Filed Company SEC Documents
or accrued on the September 30, 1999 balance sheet included in the Filed Company
SEC Documents, or as set forth in Section 3.20 of the Company Disclosure
Schedule, and except for liabilities incurred in the ordinary course of business
consistent with prior practice and otherwise not in contravention of this
Agreement, the Company does not have any liabilities or obligations of any
nature (whether absolute, contingent or otherwise, and whether or not required
to be reflected or reserved against in a consolidated balance sheet of the
Company and its subsidiaries prepared in accordance with United States generally
accepted accounting principles) that would, individually or in the aggregate,
have a Material Adverse Effect on the Company.
Section 3.21. Opinion of Company Financial Advisor. The Company has
------------------------------------
received the opinion of Xxxxxxxx Xxxxx, dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair to each class of the Company's
stockholders from a financial point of view, a signed copy of which opinion has
been delivered to Parent, and such opinion has not been amended, modified or
revoked in a manner adverse to Parent or Purchaser. The Company has been
authorized by the Company Financial Advisor to permit the inclusion of such
fairness opinion (and, subject to prior review and consent by such Company
Financial Advisor, a reference thereto) in the Offer Documents and in Schedule
14D-9 and the Proxy Statement.
Section 3.22. Intellectual Property.
---------------------
(a) Except to the extent the failure of any of the following
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company:
(i) The Company and each of its subsidiaries owns free
and clear of any Liens, claims, or similar encumbrances, and has the right to
bring actions for the infringement, dilution, misappropriation or other
violation of, and/or is licensed to use all patents and patent applications,
trademarks, service marks, trade names, and registrations and applications for
registration of industrial designs, copyrights, mask works, trademarks, service
marks, trade names, trade dress, and all domain names, technology, inventions,
know-how, trade secrets, product designs, services procedures, processes and all
agreements and other rights with respect to intellectual property and computer
programs (collectively, "Intellectual Property") used in or necessary for the
conduct of Company's business as currently conducted in all material respects
and as proposed to be conducted.
-28-
(ii) To the extent that any works of authorship, materials,
products, technology or software have been developed or created independently or
jointly by any person other than the Company for which the Company has, directly
or indirectly, paid, the Company has a written agreement with such person with
respect thereto, and the Company thereby has obtained ownership of, and is the
exclusive owner of, all Intellectual Property therein or thereto by operation of
law or by valid assignment. In each case in which either the Company has
acquired any Intellectual Property from any person, the Company has obtained a
valid and enforceable assignment sufficient to irrevocably transfer all rights
in such Intellectual Property to the Company.
(iii) All of the patents, industrial design registrations,
trademark and service xxxx registrations, copyright registrations, mask work
registrations and domain name registrations, and all applications for such
registrations, owned by the Company are, and, to the knowledge of the Company,
those licensed to the Company are, valid and in full force, are (in the case of
those owned by the Company) held of record in the name of the Company, are not
the subject of any cancellation or reexamination proceeding or any other
proceeding challenging their extent or validity, and all necessary registration,
maintenance and renewal fees in connection with such patents and registrations
have been paid and all necessary documents and certificates in connection with
such patents and registrations have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such patents
and registrations.
(iv) To the Company's knowledge, the use of such
Intellectual Property by the Company and its subsidiaries in the conduct of
their business as currently conducted and as proposed to be conducted does not
infringe on the rights of any party.
(v) To the Company's knowledge, no person is infringing on
any right of the Company or any of its subsidiaries with respect to such
Intellectual Property.
(vi) The Company and its subsidiaries are not, and the
consummation of the Transactions will not cause them to be, in breach or
violation of any agreement relating to the use of any of its Intellectual
Property, and they have not received any notification, written or oral, from any
third party that there is any such violation, breach, or inability to perform
under any such agreement.
(vii) There are no agreements, written or oral, which limit
any rights by the Company or any of its subsidiaries to use any of the
Intellectual Property owned by them.
(viii) To the Company's knowledge, none of the material
trade secrets, know- how or other confidential or proprietary information of the
Company or any Subsidiary has been disclosed to any person unless such
disclosure was necessary, and was made pursuant to an appropriate
confidentiality agreement.
(ix) Except as disclosed in Section 3.22(a)(ix) of the
Company Disclosure Schedule, the Company has not given any indemnification to
any third party against infringement of such Intellectual Property rights, and
the Company has not agreed to, or
-29-
assumed, any obligation or duty to indemnify, reimburse, hold harmless, guaranty
or otherwise assume or incur any obligation or liability or provide a right of
rescission to any third party with respect to the infringement, dilution,
misappropriation or other violation of the Intellectual Property of the Company
or any other third party.
(b) Except as disclosed in Section 3.22(b) of the Company Disclosure
Schedule, all products of the Company manufactured since January 1, 1996
(including products currently under development) and all of the Company's
Information Technology (as defined below) are capable of accurately processing,
calculating, manipulating, storing and exchanging date/time data from, into, and
between the twentieth and twenty-first centuries, including, without limitation,
the years 1999 and 2000 and any leap year calculations, provided that all other
information technology used in combination with such software properly exchanges
date/time date with such software, and will not cause a material interruption in
the ongoing operations of the Company's business on or after January 1, 2000.
For purposes of the foregoing, the term "Information Technology" shall mean and
include all software, hardware, firmware, telecommunications systems, network
systems, embedded systems and other systems, components and/or services (other
than general utility services including gas, electric, telephone and postal)
that are owned or used by the Company in the conduct of its business, or
purchased or otherwise obtained by the Company from third party suppliers.
(c) The Company and each of its affiliates requires employees to
execute, and has in fact received or will obtain prior to the expiration date of
the Offer from each such employee necessary to preserve the Licenses, as
amended, an executed Employee Confidentiality Agreement that, among other
things, obligates such employees to protect the Company's confidential
information and the confidential information the Company receives from its
customers and vendors. The Company further represents that any amendment,
alteration, improvement or other change to the Company's procedures involving
confidential information, including but not limited to such changes required as
a condition of consent to the transfer of the Wonderware OEM Master Software
License Agreement dated June 6, 1997, as amended, could not reasonably be
expected to have a Material Adverse Effect on the Company or result in a
material change in the Company's business as presently conducted and as proposed
to be conducted.
Section 3.23. Insurance. The Company and its subsidiaries maintain policies
---------
of fire and casualty, liability and other forms of insurance in such amounts,
with such deductibles and against such risks and losses as are in the Company's
judgment, reasonable for the assets and properties of the Company and its
subsidiaries and customary in the Company's industry. Except as set forth in
Section 3.23 of the Company's Disclosure Schedule, all such policies are in full
force and effect, all premiums due and payable thereon have been paid, and no
notice of cancellation or termination has been received with respect to any such
policy.
Section 3.24. Affiliate Transactions. Section 3.24 of the Company
----------------------
Disclosure Schedule sets forth a true and complete list (including names of
parties, amounts involved and brief descriptions) of all transactions,
agreements, arrangements or understandings (or series thereof), written or oral,
between the Company or any of its subsidiaries and any of its or their directors
or executive officers (including, in the case of natural persons, any of such
persons' relatives or affiliates, but excluding any dealings exclusively among
the Company and its subsidiaries)
-30-
currently existing or effected or entered into since January 1, 1998 involving
amounts in excess of $60,000, other than any such transactions, agreements,
arrangements or understandings otherwise specifically disclosed in the Filed
Company SEC Documents.
Section 3.25. Indemnification Claims. Other than as set forth on Section
----------------------
3.25 of the Company Disclosure Schedule, the Company is not aware of any
indemnification, breach of contract or similar claims by or against the Company
or any of its subsidiaries which are pending or threatened (or which could be
reasonably expected to be made in the future), in each case in excess of $50,000
in amount, with respect to any acquisition or disposition by the Company of any
assets or businesses.
Section 3.26. Absence of Questionable Payments. To the Company's knowledge,
--------------------------------
neither the Company nor any of its subsidiaries nor any director, officer,
agent, employee or other person acting on behalf of the Company or any of its
subsidiaries, has used any corporate or other funds for unlawful contributions,
payments, gifts, or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of Section 30A of the
Exchange Act. To the Company's knowledge, neither the Company nor any of its
subsidiaries nor any current director, officer, agent, employee or other person
acting on behalf of the Company or any of its subsidiaries, has accepted or
received any unlawful contributions, payments, gifts, or expenditures. To the
Company's knowledge, the Company and each of its subsidiaries which is required
to file reports pursuant to Section 12 or 15(d) of the Exchange Act is in
compliance with the provisions of Section 13(b) of the Exchange Act.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
Section 4.1. Organization and Qualification. Each of Parent and Purchaser
------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority to carry on its business as it is now being conducted. Each
of Parent and Purchaser is duly qualified as a foreign corporation or licensed
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or leased or the nature of its activities
makes such qualification or licensing necessary, except where the failure to be
so qualified or licensed and in good standing could not reasonably be expected
to prevent or materially delay the consummation of the Offer or the Merger.
Purchaser is a wholly owned subsidiary of Parent, and Parent is an indirect
wholly owned subsidiary of Siemens Aktiengesellschaft.
Section 4.2. Authority Relative to this Agreement. Each of Parent and
------------------------------------
Purchaser has all requisite corporate power and authority to execute and deliver
this Agreement and each instrument required hereby to be executed and delivered
by Parent or Purchaser prior to or at the Effective Time, to perform its
obligations hereunder and thereunder, and to consummate the Transactions. The
execution and delivery by Parent and Purchaser of this Agreement and each
instrument required hereby to be exercised and delivered by Parent or Purchaser
prior to or at the
-31-
Effective Time and the performance of their respective obligations hereunder and
thereunder, and the consummation by Parent and Purchaser of the Transactions
have been duly and validly authorized by the respective Boards of Directors of
Parent and Purchaser, and the shareholder of Purchaser, and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement, or commence the Offer or to consummate the Transactions (including
the Offer) other than filing and recordation of appropriate merger documents as
required by the PBCL or the merger filing required by the German Federal Cartel
Authority and publication after consummation of the offer of an ad-hoc
disclosure pursuant to Section 15 of the German Securities Trading Act. This
Agreement has been duly and validly executed and delivered by each of Parent and
Purchaser and, assuming this Agreement constitutes a valid and binding
obligation of the Company, this Agreement constitutes a valid and binding
agreement of each of Parent and Purchaser, enforceable against each of Parent
and Purchaser in accordance with its terms.
Section 4.3. Proxy Statement. None of the information supplied in writing
---------------
by Parent, Purchaser and their respective affiliates specifically for inclusion
in the Proxy Statement, if required, shall, at the time the Proxy Statement is
mailed, at the time of the Shareholder Meeting or at the Effective Time, 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; provided, however, that Parent and Purchaser make no representation
or warranty as to any of the information relating to and supplied by or on
behalf of the Company specifically for inclusion in the Proxy Statement. If, at
any time prior to the Effective Time, any event relating to Parent or any of its
affiliates, officers or directors is discovered by Parent that should be set
forth in a supplement to the Proxy Statement, Parent will promptly inform the
Company.
Section 4.4. Consents and Approvals; No Violation. Subject to the taking of
------------------------------------
the actions described in the immediately succeeding sentence, the execution and
delivery of this Agreement do not, and the consummation of the Transactions will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the material properties
or assets of Parent under (i) the certificate of incorporation or bylaws of
Parent or Purchaser, (ii) any loan or credit agreement, note, bond, indenture,
lease or other agreement, instrument or Permit applicable to Parent or Purchaser
or their respective properties or assets, (iii) any judgment, order, writ,
injunction, decree, law, statute, ordinance, rule or regulation applicable to
Parent or Purchaser or their respective properties or assets, other than, in the
case of clause (ii) and (iii), any such conflicts, violations, defaults, rights
or Liens that individually or in the aggregate would not (x) impair in any
material respect the ability of Parent and Purchaser to perform their respective
obligations under this Agreement or (y) prevent or impede the consummation of
any of the Transactions. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or any other
person is required by Parent or Purchaser in connection with the execution and
delivery of this Agreement or the consummation by Parent or Purchaser, as the
case may be, of any of the Transactions, except (A) in connection with the HSR
Act or in connection with the German Act Against Restraints on Competition (the
"GWB Act") or under applicable foreign law, including, without limitation, the
antitrust laws or laws intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint
-32-
of trade and any filings and consents which may be required by any foreign
environmental, health or safety laws or regulations pertaining to any
notification, disclosure or required approval triggered by the Merger or the
Transactions, (B) pursuant to the Securities Act, and the Exchange Act, (C) the
filing of the Articles of Merger pursuant to the PBCL, (D) such consents,
approvals, orders, authorizations, registrations and declarations as may be
required under the law of any foreign country in which the Parent or any of its
subsidiaries conducts any business or owns any assets, (E) such filings and
approvals as may be required under the "blue sky," takeover or securities laws
of various states, or (F) the filing of reports with the U.S. Department of
Commerce regarding foreign direct investment in the United States, (G)
publication after consummation of the Offer of an ad-hoc disclosure pursuant to
Section 15 of the German Securities Trading Act or (H) where the failure to
obtain any such consent, approval, authorization or permit, or to make any such
filing or notification, would not prevent or delay consummation of the Offer or
the Merger or would not otherwise prevent Parent from performing its obligations
under this Agreement or where the requirement to obtain such consent, approval,
authorization or permit, or to make such filing or notification arises from the
regulatory status of the Company or its subsidiaries.
Section 4.5. Financing. Parent will have at each of (i) the time of
---------
acceptance for purchase by Purchaser of Securities pursuant to the Offer and
(ii) the Effective Time, and will make available to Purchaser (or cause to be
made available), the funds necessary to consummate the Offer and the Merger on
the terms contemplated by this Agreement. In this connection, Parent has
previously provided the Company with financial information with respect to
Parent pursuant to a letter dated January 12, 2000 and Parent represents that
such financial information is materially accurate.
Section 4.6. Brokerage Fees and Commissions. Except for those fees and
------------------------------
expenses payable to Xxxxxxx, Xxxxx & Co. oHG, a German entity, no person is
entitled to receive any investment banking brokerage or finder's fee or
commission in connection with this Agreement or the Transactions based upon
arrangements may by or on behalf of Parent or Purchaser.
Section 4.7. Schedule 14D-1; Offer Documents. Neither the Schedule 14D-1,
-------------------------------
the Offer Documents nor any information supplied by Parent or Purchaser in
writing for inclusion in the Schedule 14D-9 shall, at the respective times the
Schedule 14D-9, the Schedule 14D-1, the Offer Documents or any amendments or
supplements thereto are filed with the SEC or are first published, sent or given
to shareholders of the Company, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Schedule 14D-1 and
the Offer Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, no representation or warranty is made by Parent
or Purchaser with respect to statements made or incorporated by reference
therein based on information supplied by the Company specifically for inclusion
or incorporation by reference therein.
-33-
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1. Conduct of Business of the Company Pending the Merger. The
-----------------------------------------------------
Company hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contemplated by this Agreement or consented to in writing by
Parent, it will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices;
(b) use its reasonable best efforts to preserve intact its
business organization, maintain its rights and franchises, retain the services
of its respective key employees and maintain its relationships with its
respective customers and suppliers and others having business dealings with it
to the end that its goodwill and ongoing business shall be unimpaired at the
Effective Time;
(c) maintain and keep its material properties and assets in as
good repair and condition as at present, ordinary wear and tear excepted, and
maintain supplies and inventories in quantities consistent with its customary
business practice; and
(d) use its reasonable best efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage to that
currently maintained.
Section 5.2. Prohibited Actions by the Company. Without limiting the
---------------------------------
generality of Section 5.1, except as set forth in Section 5.2 of the Company
Disclosure Schedule, the Company covenants and agrees that, except as expressly
contemplated by this Agreement or otherwise consented to in writing by Parent,
from the date of this Agreement until the Effective Time, it will not do, and
will not permit any of its subsidiaries to do, any of the following:
(a) (i) increase the compensation (or benefits) payable to or to
become payable to any director or employee, except for increases in salary or
wages of employees in the ordinary course of business and consistent with past
practice; (ii) grant any severance or termination pay (other than pursuant to
the normal severance policy or practice of the Company or its subsidiaries as
disclosed in Section 3.12 of the Company Disclosure Schedule and in effect on
the date of this Agreement) to, or enter into or amend in any material respect
any employment or severance agreement with, any employee; (iii) establish,
adopt, enter into or amend any collective bargaining agreement or Benefit Plan
of the Company or any Commonly Controlled Entity; or (iv) take any action to
accelerate any rights or benefits, or make any determinations not in the
ordinary course of business consistent with past practice, under any collective
bargaining agreement or Benefit Plan of the Company or any Commonly Controlled
Entity;
(b) declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property), outstanding
shares of capital stock, except for regular quarterly dividends on the Company
Preferred Stock consistent with past practices (including as to declaration,
record and payment dates), each such quarterly dividend in
-34-
no event to exceed $0.0125 per share of Company Preferred Stock and dividends by
a wholly owned subsidiary of the Company to the Company or another wholly owned
subsidiary of the Company;
(c) except as provided by Section 6.14 hereof, redeem, purchase
or otherwise acquire, or offer or propose to redeem, purchase or otherwise
acquire, any outstanding shares of capital stock (including, without limitation,
the Company Preferred Stock) of, or other equity interests in, or any securities
that are convertible into or exchangeable for any shares of capital stock of, or
other equity interests in, or any outstanding options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity interests in,
the Company or any of its subsidiaries (other than (i) any such acquisition by
the Company or any of its wholly owned subsidiaries directly from any wholly
owned subsidiary of the Company in exchange for capital contributions or loans
to such subsidiary, or (ii) any acquisition, purchase, forfeiture or retirement
of shares of Company Common Stock or the Options occurring pursuant to the terms
(as in effect on the date of this Agreement) of any existing Benefit Plan of the
Company or any of its subsidiaries, in a manner otherwise consistent with the
terms of this Agreement);
(d) effect any reorganization or recapitalization; or split,
combine or reclassify any of the capital stock of, or other equity interests in,
the Company or any of its subsidiaries or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of such capital stock or such equity interests;
(e) offer, sell, issue or grant, or authorize or propose the
offering, sale, issuance or grant of, any shares of capital stock of, or other
equity interests in, any securities convertible into or exchangeable for (or
accelerate any right to convert or exchange securities for) any shares of
capital stock of, or other equity interest in, or any options, warrants or
rights of any kind to acquire any shares of capital stock of, or other equity
interests in, or any Voting Company Debt or other voting securities of, the
Company or any of its subsidiaries, or any "phantom" stock, "phantom" stock
rights, SARs or stock-based performance units, other than issuances of shares of
Company Common Stock upon the exercise of the Options outstanding at the date of
this Agreement in accordance with the terms thereof (as in effect on the date of
this Agreement) and the acceleration of such Options as contemplated in Sections
2.10 and 6.8;
(f) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or in
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire any assets
of any other person (other than the purchase of inventories and supplies from
suppliers or vendors in the ordinary course of business and consistent with past
practice and other than asset acquisitions which do not exceed $50,000 in any
individual transaction or $100,000 in the aggregate);
(g) sell, lease, exchange or otherwise dispose of, or grant any
Lien with respect to, any of the properties or assets of the Company or any of
its subsidiaries that are, individually or in the aggregate, material to the
business of the Company and its subsidiaries, except for dispositions of excess
or obsolete assets and sales of inventories in the ordinary course of business
and consistent with past practice;
-35-
(h) propose or adopt any amendments to its articles of
incorporation or bylaws or other organizational documents;
(i) effect any change in any accounting methods, principles or
practices in effect as of December 31, 1998 affecting the reported consolidated
assets, liabilities or results of operations of the Company, except as may be
required by a change in generally accepted accounting principles;
(j) (i) incur any indebtedness for borrowed money (other than
borrowings for working capital purposes under the Company's existing revolving
credit facility disclosed on Section 3.17 of the Company Disclosure Schedule
which aggregate borrowings shall not exceed $5,000,000 at any time), issue or
sell any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its subsidiaries, guarantee any such
indebtedness or debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of any of the
foregoing, or (ii) make any loans, advances or capital contributions to, or
investments in, any other person, other than to or in the Company or any direct
or indirect wholly owned subsidiary of the Company;
(k) enter into any Contract described in Section 3.17;
(l) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in the most
recent consolidated financial statements (or the notes thereto) of the Company
included in the Filed Company SEC Documents or incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice;
(m) take any of the actions set forth in Section 3.4 not
otherwise specified herein;
(n) settle the terms of any material litigation affecting the
Company or any of its subsidiaries;
(o) make any Tax election except in a manner consistent with past
practice, change any method of accounting for Tax purposes, or settle or
compromise any material Tax liability;
(p) make or agree to make any new capital expenditures other than
capital expenditures which individually do not exceed $250,000 and which in the
aggregate do not exceed $500,000 and provided such are in accordance with the
capital expenditure budget previously provided to Parent; or
(q) agree in writing or otherwise to take any of the foregoing
actions or any action which would make any representation or warranty of the
Company in this Agreement or the Tender and Option Agreement untrue or incorrect
in any material respect or
-36-
cause any condition set forth in Annex A to occur or any condition in
Article VII to be unsatisfied.
ARTICLE VI
COVENANTS
Section 6.1. No Solicitation.
---------------
(a) From and after the date hereof until the Effective Time or
the termination of this Agreement in accordance with Section 8.1, neither the
Company nor any of its subsidiaries will directly or indirectly initiate,
solicit or encourage (including by way of furnishing non-public information or
assistance), or take any other action to facilitate, any inquiries or the making
or submission of any Acquisition Proposal (as defined herein) or enter into or
maintain or continue discussions or negotiate with any person or group in
furtherance of such inquiries or to obtain or induce any person or group to make
or submit an Acquisition Proposal or agree to or endorse any Acquisition
Proposal or assist or participate in, facilitate or encourage, any effort or
attempt by any other person or group to do or seek any of the foregoing or
authorize or permit any of its officers, directors or employees or any of its
subsidiaries or affiliates or any investment banker, financial advisor,
attorney, accountant or other representative or agent retained by it or any of
its subsidiaries to take any such action; provided, however, that nothing
contained in this Agreement shall prohibit the Company or the Board of Directors
of the Company from, prior to the earlier to occur of acceptance for payment of
Securities pursuant to the Offer or adoption of this Agreement by the requisite
vote of the stockholders of the Company, furnishing information to or entering
into discussions or negotiations with any person or entity that makes an
unsolicited (i.e. not solicited after the date of this Agreement) written, bona
fide Acquisition Proposal that constitutes, or may reasonably be expected to
lead to, any Superior Proposal (as defined herein), if, and only to the extent
that (i) the Board of Directors of the Company, after consultation with and
based upon the opinion of independent legal counsel (who may be the Company's
regularly engaged independent legal counsel), determines reasonably and in good
faith that the failure to do so would reasonably be expected to constitute a
breach of the fiduciary duty of the Board of Directors of the Company under
applicable law and (ii) prior to taking such action the Company (x) delivers to
Parent and Purchaser the notice required pursuant to Section 6.1(c) stating that
it is taking such action and (y) receives from such person or group an executed
confidentiality agreement that is not, in any material respect, less restrictive
as to such person or entity than the Confidentiality Agreement and which, in any
event, contains customary confidentiality and standstill restrictions and shall
not contain any exclusivity provisions which would prohibit the Company from
complying with its obligations under this Section 6.1 or otherwise under this
Agreement. Without limiting the foregoing, it is understood that any violation
of the restrictions set forth in this Section 6.1 by any officer, director,
employee or affiliate of the Company or any of its subsidiaries or any
investment banker, attorney, accountant or other advisor, agent or
representative of the Company or any of its subsidiaries, whether or not such
person is purporting to act on behalf of the Company or any of its subsidiaries
or otherwise, shall be deemed to be a breach of this Section 6.1 by the Company.
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(b) Except as expressly permitted by this Section 6.1, neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw, modify in a manner adverse to Parent or Purchaser or fail to make, or
propose to withdraw, modify in a manner adverse to Parent or Purchaser or fail
to make its approval or recommendation of the Offer or the Merger or of the
Tender and Option Agreement, this Agreement and the other Transactions, (ii)
approve or recommend, or propose to approve or recommend, any Acquisition
Proposal, (iii) take any action not previously taken to render the provisions of
any anti-takeover statute, rule or regulation (including Sections 2538 through
2588, inclusive, of the PBCL) inapplicable to any person (other than Parent,
Purchaser or their affiliates) or group or to any Acquisition Proposal, or (iv)
cause the Company to accept such Acquisition Proposal and/or enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Acquisition
Proposal; provided, however, that prior to the earlier to occur of acceptance
for payment of Securities pursuant to the Offer or adoption of this Agreement by
the requisite vote of the stockholders of the Company, the Board of Directors of
the Company may terminate this Agreement pursuant to Section 8.1(d)(ii) if, and
only to the extent that (A) such Acquisition Proposal is a Superior Proposal,
(B) the Board of Directors of the Company, after consultation with and based
upon the written opinion of independent legal counsel (who may be the Company's
regularly engaged independent counsel), determines reasonably and in good faith
that the failure to do so would reasonably be expected to constitute a breach of
the fiduciary duty of the Board of Directors of the Company under applicable
law, (C) the Company shall, prior to or simultaneously with the taking of such
action, have paid or pay to Parent or Purchaser or their designee the
Termination Fee referred to in Section 8.3, (D) the Company is not in material
breach of this Agreement, including without limitation this Section 6.1, (E) the
Company shall have complied with its obligations under Section 8.1(d)(ii) and
(F) concurrently with such termination, the Company enters into a definitive
acquisition agreement with respect to such Superior Proposal.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) above, the Company shall promptly (and in any event,
within one business day) advise Parent orally and in writing of any request for
information or the submission or receipt of any Acquisition Proposal, or any
inquiry with respect to or which could reasonably be expected to lead to any
Acquisition Proposal, the material terms and conditions of such request,
Acquisition Proposal or inquiry, and the identity of the person making any such
request, Acquisition Proposal or inquiry and the Company's response or responses
thereto. The Company will keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such request, Acquisition
Proposal or inquiry. Immediately following the execution of this Agreement, the
Company will cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
(d) "Acquisition Proposal" means an inquiry, offer or proposal
--------------------
regarding any of the following (other than the Transactions contemplated by this
Agreement) involving the Company: (i) any merger, consolidation, share exchange,
recapitalization, liquidation, dissolution, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 20% or more of the assets of the Company and its
subsidiaries, taken as a whole, or of any Material Business (as defined herein)
or of any subsidiary or subsidiaries responsible for a Material Business in a
single transaction or
-38-
series of related transactions; (iii) any tender offer (including a self tender
offer) or exchange offer that, if consummated, would result in any person or
group beneficially owning more than 20% of the outstanding shares of any class
of equity securities of the Company or its subsidiaries (or in the case of a
person or group which beneficially owns more than 20% of the outstanding shares
of any class of equity securities of the Company as of the date hereof, would
result in such person or group increasing the percentage or number of shares of
such class beneficially owned by such person or group) or the filing of a
registration statement under the Securities Act in connection therewith; (iv)
any acquisition of 20% or more of the outstanding shares of capital stock of the
Company or the filing of a registration statement under the Securities Act in
connection therewith or any other acquisition or disposition the consummation of
which would prevent or materially diminish the benefits to Parent of the Merger;
or (v) any public announcement by the Company or any third party of a proposal,
plan or intention to do any of the foregoing or of any agreement to engage in
any of the foregoing. "Superior Proposal" means any proposal made by one or more
third parties to acquire, directly or indirectly, including pursuant to a tender
offer, exchange offer, merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or other similar
transaction, all the shares of Company Common Stock and Company Preferred Stock
then outstanding or all or substantially all of the assets of the Company and
its subsidiaries which the Board of Directors of the Company determines
reasonably and in good faith (based on the written opinion of Xxxxxxxx Xxxxx or
another financial advisor of nationally recognized reputation) to be superior to
each of (x) the holders of Company Common Stock and (y) the holders of Company
Preferred Stock from a financial point of view (taking into account any changes
to the terms of this Agreement and the Offer that have been proposed by Parent
in response to such proposal) and to be more favorable to the Company and each
of (x) the holders of Company Common Stock and (y) the holders of Company
Preferred Stock (taking into account all financial and strategic considerations,
including relevant legal, financial, regulatory and other aspects of such
proposal and the third party making such proposal and the conditions and
prospects for completion of such proposal) than the Offer, the Merger and the
other Transactions taken as a whole. "Material Business" means any business (or
the assets needed to carry out such business) that contributed or represented
15% or more of the net sales, the net income or the assets (including equity
securities) of the Company and its subsidiaries taken as a whole.
(e) Nothing contained in this Section 6.1 shall prohibit the
Company or the Board of Directors of the Company from taking and disclosing to
its stockholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's stockholders if the
Board of Directors of the Company, after consultation with and based upon the
written opinion of independent legal counsel (who may be the Company's regularly
engaged independent counsel), determines reasonably and in good faith that the
failure to take such action would reasonably be expected to constitute a breach
of the fiduciary duty of the Board of Directors under applicable law; provided
that neither the Board of Directors of the Company nor any committee thereof
withdraws or modifies, or proposes to withdraw or modify, the approval or
recommendation of the Board of Directors of the Company of the Offer or the
Merger or approves or recommends, or publicly proposes to approve or recommend,
an Acquisition Proposal unless and until the Company and the Board of Directors
of the Company have complied with all the provisions of this Section 6.1.
-39-
Section 6.2. Access to Information. Between the date of this Agreement and
---------------------
the Effective Time, the Company shall, and shall cause its subsidiaries to (a)
afford to Parent and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives full access during
normal business hours and at all other reasonable times to the officers,
employees, agents, properties, offices and other facilities of the Company and
its subsidiaries and to their books and records (including all Tax Returns and
all books and records related to Taxes and such returns), (b) permit Parent to
make such inspections as it may require (and the Company shall cooperate with
Parent in any inspections, including, without limitation, environmental due
diligence), and (c) furnish promptly to Parent and its representatives a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws and such other information concerning the business, properties, contracts,
records and personnel of the Company and its subsidiaries (including financial,
operating and other data and information) in the possession of the Company or
the Company's counsel, accountants or other consultants or agents as may be
reasonably requested, from time to time, by or on behalf of Parent.
Section 6.3. Confidentiality Agreement. The parties agree that the
-------------------------
provisions of the Confidentiality Agreement dated November 15, 1999 (the
"Confidentiality Agreement") between Parent and the Company shall remain binding
and in full force and effect in accordance with its terms. The parties shall
comply with, and shall cause their respective representatives to comply with,
all of their respective obligations under the Confidentiality Agreement until
the Effective Time, at which time the Confidentiality Agreement shall terminate
and be of no further force and effect.
Section 6.4. Reasonable Best Efforts. (a) Subject to the terms and
-----------------------
conditions herein (including Section 6.1), each of the parties hereto agrees to
use its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
as soon as reasonably practicable the Transactions. In case at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and the Tender and Option Agreement, the proper
officers and directors of each party to this Agreement shall take all such
necessary action. Such reasonable best efforts shall apply to, without
limitation, (i) the obtaining of all necessary consents, approvals or waivers
from third parties and Governmental Entities necessary to the consummation of
the Transactions and (ii) opposing vigorously any litigation or administrative
proceeding relating to this Agreement and the Tender and Option Agreement or the
transactions contemplated hereby and thereby, including, without limitation,
promptly appealing any adverse court or agency order. Notwithstanding the
foregoing or any other provisions contained in this Agreement or the Tender and
Option Agreement to the contrary, neither Parent nor any of its affiliates shall
be under any obligation of any kind to (i) respond to a second request for
information under the HSR Act or to enter into any negotiations or to otherwise
agree with or litigate against any Governmental Entity, including but not
limited to any governmental or regulatory authority with jurisdiction over the
enforcement of any applicable federal, state, local and foreign antitrust,
competition or other similar laws, or (ii) otherwise agree with any Governmental
Entity or any other party to sell or otherwise dispose of, agree to any
limitations on the ownership or control of, or hold separate (through the
establishment of a trust or otherwise) particular assets or categories of assets
or businesses of any of the Company, its subsidiaries, Parent or any of Parent's
affiliates.
-40-
(b) The Company shall give and make all required and material
notices and reports to the appropriate persons with respect to the Permits and
Environmental Permits that may be necessary for the sale and purchase of the
business and the ownership, operation and use of the assets of Surviving
Corporation by Parent and Purchaser after the Effective Time. Subject to the
other terms of this Agreement, each of the Company, Parent and Purchaser shall
cooperate and use their respective reasonable best efforts to make all filings,
to obtain all actions or nonactions, waivers, Permits and orders of Governmental
Entities necessary to consummate the Transactions and to take all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity. Each of the parties hereto
will furnish to the other parties such necessary information and reasonable
assistance as such other parties may reasonably request in connection with the
foregoing.
(c) The Company shall use its reasonable best efforts to complete
prior to the expiration of the Offer all activities, if any (including, without
limitation, all investigation, remediation, notifications and certifications)
required of the Company in connection with, and in compliance with, the
Connecticut Property Transfer Law (Sections 22a-134 through 22a-134e of the
Connecticut General Statutes, as amended by Public Act 95-183) (the "Connecticut
Property Transfer Law") with respect to the 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx property (the "Plainville Property").
(d) The Company and its Board of Directors shall (i) use its
reasonable best efforts to ensure that no state takeover statute or similar
statute, rule or regulation (including Sections 2538 through 2588, inclusive, of
the PBCL) is or becomes applicable to the Offer, the Merger, this Agreement, the
Tender and Option Agreement or any of the other Transactions contemplated by the
foregoing and (ii) if any state takeover statute or similar statute, rule or
regulation becomes applicable to the Offer, the Merger, this Agreement, the
Tender and Option Agreement or any other Transactions, use its reasonable best
efforts to ensure that the Offer, the Merger and the other Transactions,
including the transactions contemplated by this Agreement and the Tender and
Option Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Tender and Option Agreement and otherwise
to minimize the effect of such statute or regulation on the Offer, the Merger
and the other Transactions, including the Transactions contemplated by this
Agreement, and the Tender and Option Agreement.
Section 6.5. Indemnification of Directors and Officers.
-----------------------------------------
(a) Parent and Purchaser agree that all rights to indemnification
for acts or omissions occurring prior to the Effective Time existing as of the
date hereof in favor of the current or former directors or officers of the
Company and its subsidiaries as provided in the Company and/or, if greater, such
subsidiaries' respective articles of incorporation or bylaws shall survive the
Merger and shall continue in full force and effect in accordance with their
terms for a period of six years from the Effective Time. Parent shall cause to
be maintained, if commercially available, for a period of six years from the
Effective Time the Company's current directors' and officers' insurance and
indemnification policy (the "D&O Insurance") (provided that Parent may
substitute therefor, at its election, policies or financial guarantees with the
same carriers or other obligors as insure Parent's directors and officers of at
least the same coverage and amounts containing terms and conditions which are
substantially similar to the existing
-41-
D&O Insurance to the extent that such insurance policies provide coverage for
events occurring prior to the Effective Time for all persons who are or were
directors and/or officers of the Company at any time prior to the Effective
Time, so long as the annual premium to be paid by the Company after the
Effective Time for such D&O Insurance during such six-year period would not
exceed $133,875 per year. If, during such six- year period, such insurance
coverage cannot be obtained at all or can only be obtained for an amount in
excess of $133,875 per year, Parent shall use reasonable efforts to cause such
insurance coverage to be obtained for an amount equal to $133,875 per year, on
terms and conditions substantially similar to the existing D&O Insurance.
(b) If any claim or claims shall, subsequent to the Effective
Time and within six years thereafter, be made in writing against any present or
former director or officer of the Company or its subsidiaries based on or
arising out of the services of such person prior to the Effective Time in the
capacity of such person as a director or officer of the Company or its
subsidiaries (and such director or officer shall have given Parent written
notice of such claim or claims within such six year period), the provisions of
Section 6.5(a) respecting the rights to indemnify the current or former
directors or officers under the articles of incorporation and bylaws of the
Company and/or its subsidiaries shall continue in effect until the final
disposition of all such claims.
(c) Notwithstanding anything to the contrary in this Section
6.5, neither Parent nor the Surviving Corporation shall be liable for any
settlement effected without its written consent, which shall not be unreasonably
withheld.
Section 6.6. Event Notices and Other Actions. (a) From and after the date
-------------------------------
of this Agreement until the Effective Time, the Company shall promptly notify
Parent and Purchaser of (i) the occurrence or nonoccurrence of any event, the
occurrence or nonoccurrence of which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied, (ii) the
Company's failure to comply with any covenant or agreement to be complied with
by it pursuant to this Agreement which has resulted in, or could reasonably be
expected to result in, any condition to the Offer set forth in Annex A, or any
condition to the Merger set forth in Article VII, not being satisfied and (iii)
any representation or warranty made by the Company contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate in any respect
or any such representation or warranty that is not so qualified as to
materiality becoming untrue or inaccurate in any material respect. The Company's
delivery of any notice pursuant to this Section 6.6(a) shall not cure any breach
of any representation or warranty of the Company contained in this Agreement or
otherwise limit or affect the remedies available hereunder to Parent or
Purchaser.
(b) The Company shall use its reasonable best efforts not to,
and shall use its reasonable best efforts not to permit any of its subsidiaries
to, take any action or nonaction that will, or that could reasonably be expected
to, result in (i) any of the representations and warranties of the Company set
forth in this Agreement that is qualified as to materiality becoming untrue,
(ii) any of such representations and warranties that is not so qualified
becoming untrue in any material respect or (iii) except as otherwise permitted
by Section 6.1 and
-42-
subject to Section 6.4(a), any condition to the Offer set forth in Annex A, or
any condition to the Merger set forth in Article VII, not being satisfied.
Section 6.7. Third Party Standstill Agreements. During the period from the
---------------------------------
date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any material provision of any confidentiality
or standstill or similar agreement to which the Company or any of its
subsidiaries is a party (other than any involving Parent or Purchaser). Subject
to the foregoing, during such period, the Company agrees to enforce and agrees
to permit (and, to the fullest extent permitted under applicable law, hereby
assigns its rights thereunder to Parent and Purchaser) Parent and Purchaser to
enforce on its behalf and as third party beneficiaries thereof, to the fullest
extent permitted under applicable law, the provisions of any such agreements,
including obtaining injunctions to prevent any breaches of such agreements and
to enforce specifically the terms and provisions thereof in any court or other
tribunal having jurisdiction. Notwithstanding the foregoing, nothing in this
Section 6.7 is intended to prevent the Company from exercising its rights under
Section 6.1 in accordance with the provisions of such Section. In addition, the
Company hereby waives any rights the Company may have under any standstill or
similar agreements to object to the transfer to Purchaser of all Securities held
by stockholders covered by such standstill or similar agreements and hereby
covenants not to consent to the transfer of any Securities held by such
stockholders to any other person unless (i) the Company has obtained the
specific, prior written consent of Parent with respect to any such transfer or
(ii) this Agreement has been terminated pursuant to Article VIII.
Section 6.8. Employee Stock Options; Employee Plans and Benefits and
-------------------------------------------------------
Employment Contracts.
--------------------
(a) Company Stock Option Plans. Simultaneously with the
--------------------------
execution of this Agreement, the Board of Directors of the Company (or, if
appropriate, any committee administering the Company Stock Option Plans) shall
adopt such resolutions or take such other actions as are required to effect the
transactions contemplated by Section 2.10 in respect of all outstanding Options
and thereafter the Board of Directors of the Company (or any such committee)
shall adopt any such additional resolutions and take such additional actions as
are required in furtherance of the foregoing.
(b) Payments in Respect of Options. Each Option cancelled
------------------------------
pursuant to Section 2.10 shall, upon cancellation, be converted into the right
to receive an amount in cash equal to the product of (i) the number of
Securities subject to such Option and (ii) the excess, if any, of the Merger
Consideration for Company Common Stock over the exercise price per share subject
or related to such Option.
(c) Time of Payment. The amount described in subsection (b)
---------------
shall be paid by the Company immediately before the Effective Time.
(d) Taxes; Interest. All amounts payable pursuant to Section
---------------
2.10 and Section 6.8(b) and (c) shall be subject to any required withholding of
taxes and shall be paid without interest.
-43-
(e) Termination of Equity-Based Compensation. No further
----------------------------------------
grants of Options shall be made under the Company Stock Option Plans after the
date of this Agreement, and the provision in any other Benefit Plan providing
for the potential issuance, transfer or grant of any capital stock of the
Company or any of its subsidiaries or any interest, or release of restrictions
in respect of any capital stock of the Company or any of its subsidiaries shall
be deleted, and the Company Stock Options Plans shall be terminated, as of the
Effective Time, and the Company shall ensure that following the Effective Time
no holder of an Option (whether or not outstanding as of the Effective Time),
restricted stock, derivative security, or any participant in any other Benefit
Plan shall have any right thereunder to acquire any capital stock of the Company
or any of its subsidiaries or the Surviving Corporation. No participant in the
Company Stock Option Plans shall be entitled to receive any other payment or
benefit thereunder except as provided in Section 2.10 and Section 6.8.
(f) Employment Agreement. From and after the Effective Time,
--------------------
Parent and Purchaser shall, and shall cause the Surviving Corporation to honor
in accordance with its terms the existing employment agreement listed in Section
6.8(f) of the Company Disclosure Schedule.
(g) Executive Incentive Plan. Parent and Purchaser shall and
------------------------
shall cause the Surviving Corporation to honor the amounts due to any officer,
director or employee of the Company pursuant to the Executive Incentive Plan
under any relevant calculation periods for such plan which closed prior to
January 1, 2000. Parent and Purchaser make no commitment that the Surviving
Corporation will continue the Executive Incentive Plan.
(h) No Right to Employment. Nothing contained in this
----------------------
Agreement shall confer upon any employee of the Company, any ERISA Affiliate or
any of the Company's subsidiaries any right with respect to employment by
Parent, the Purchaser or any of the Parent's subsidiaries, nor shall anything
herein interfere with the right of Parent, the Purchaser or any of the Parent's
subsidiaries to terminate the employment of any such employee at anytime, with
or without cause, or except as otherwise expressly provided in this Section 6.8
restrict Parent, the Purchaser or any of the Parent's subsidiaries in the
exercise of their independent business judgment in modifying any other terms and
conditions of the employment of any such employee.
(i) Amendments to the Pension Plan; Adoption of Separation
------------------------------------------------------
Plan.
----
(i) Subsequent to the Effective Time, Purchaser or
Parent shall cause appropriate action to be taken to amend the Company's Pension
Plan (the "Company Pension Plan") with respect to the benefit earned under the
Company Pension Plan by those participants in the Company Pension Plan who are
actively employed by the Company at the Effective Time ("Eligible
Participants"), as set forth in this Section 6.8(i). These amendments shall be
as follows: (A) the reduction in the amount of the Company Pension Plan benefit
that is payable to Eligible Participants due to the commencement of such
Eligible Participant's Company Pension Plan benefit prior to the Eligible
Participant attaining his or her normal retirement age under the Company Pension
Plan shall be changed to be the same as the reduction that is set forth in
Section 3 of Article IV of the Siemens Retirement Plan, provided that the
Eligible Participant is at least age 55 and has at least ten years of vesting
service under the Company Pension Plan at the time of his or her termination of
employment from the Surviving
-44-
Corporation or an affiliate of the Surviving Corporation; and (B) a lump sum
optional form of benefit payment shall be added to the Company Pension Plan,
provided that the Eligible Participant is at least age 55 and has at least ten
years of vesting service under the Company Pension Plan at the time of his or
her termination of employment from the Surviving Corporation or an affiliate of
the Surviving Corporation. All of the other provisions of the Company Pension
Plan shall continue to apply in accordance with its terms.
(ii) Subsequent to the Effective Time, Purchaser or
Parent shall cause appropriate action to be taken to merge the assets and
liabilities of the Company Pension Plan into the Siemens Retirement Plan, or its
successor Plan.
(iii) If and when a cash balance formula becomes
effective under the Siemens Retirement Plan, Purchaser or Parent shall cause
appropriate action to be taken to have the calculation of the opening balances
for Eligible Participants who are actively employed with the Surviving
Corporation or any other U.S. affiliate of Parent at the time the conversion to
such formula becomes effective for such Eligible Participants to be made in
accordance with the provisions of this Section 6.8(i)(iii). The calculation of
the opening balance under the cash balance formula for an Eligible Participant
for whom the sum of his or her age and vesting service under the Xxxxx Pension
Plan at the time of the conversion is less than 55, shall be done in accordance
with the terms of the Siemens Retirement Plan in effect at the time of the
conversion. For an Eligible Participant for whom the sum of his or her age and
vesting service under the Company Pension Plan at the time of the conversion is
equal to or more than 55, the opening balance shall be equal to the sum of (A)
the opening balance calculated in accordance with the provisions of the Siemens
Retirement Plan in effect at the time of the conversion and (B) the additional
amount that is necessary so that after taking into account future pay and
interest credits the projected age 65 benefit from the cash balance formula of
the Siemens Retirement Plan is equal to the projected age 65 benefit from the
Company Pension Plan. For purposes of calculating clause (A) under the
immediately preceding sentence, if the Eligible Participant is at least age 55
and has at least 10 years of vesting service under the Company Pension Plan at
the time of the conversion, the Participant's opening balance shall be based
upon the Eligible Participant's early retirement benefit under the Company
Pension Plan, and for all other Eligible Participants an age 65 benefit shall be
used. For purposes of calculating the amount under clause (B) in the second
preceding sentence, the following assumptions shall be used: (1) an interest
rate of 6.5%, (2) the prevailing commissioners' standard mortality table as
described in Section 807 (d) of the Internal Revenue Code used to determine
reserves for group annuity contracts issued on the date the conversion is
calculated, (3) a salary scale of 4%, and (4) pay credits ranging from 4 to 15%.
(iv) Subsequent to the Effective Time, Purchaser or
Parent shall cause appropriate action to be taken to have a separation plan
adopted with respect to the employees of the Company who are actively employed
by the Company at the Effective Time which will provide (A) one week of
separation pay for each full year of service, and (B) an additional payment of
eight weeks of separation pay if a general release acceptable to the employer of
such employees is executed, and for purposes of calculating benefits under this
separation plan, service with the Company that is recognized as vesting service
under the Company Pension Plan shall be included.
-45-
(j) Statement of Principles. Parent and Purchaser shall, and
-----------------------
shall cause the Surviving Corporation to honor the obligations created by the
Company Employee Benefit and Severance Principles adopted by the Board of
Directors of the Company at a Special Meeting of such Board held on January 14,
2000 to the same extent as if they were set forth in this Agreement.
Section 6.9. Meeting of the Company's Shareholders.
-------------------------------------
(a) To the extent required by applicable law and subject to
the Company's rights under Section 6.1, the Company shall promptly after
consummation of the Offer take all action necessary in accordance with the PBCL
and its Articles of Incorporation and Bylaws to convene a Shareholder Meeting to
consider and vote on the Merger and this Agreement. At the Shareholder Meeting,
all of the Securities then owned by Parent, Purchaser or any other subsidiary of
Parent shall be voted to approve the Merger and this Agreement. The Board of
Directors of the Company shall recommend that the Company's shareholders vote to
approve the Merger and this Agreement if such vote is sought, shall use its best
efforts to solicit from shareholders of the Company proxies in favor of the
Merger and shall take all other action in its judgment necessary and appropriate
to secure the vote of shareholders required by the PBCL to effect the Merger.
(b) Parent and Purchaser shall not, and they shall cause
their subsidiaries not to, sell, transfer, assign, encumber or otherwise dispose
of the Securities acquired pursuant to the Offer or otherwise prior to the
Shareholder Meeting; provided, however, that this Section 6.9(b) shall not apply
to the sale, transfer, assignment, encumbrance or other disposition of any or
all such Securities in transactions involving solely Parent, Purchaser and/or
one or more of their wholly owned subsidiaries.
(c) Notwithstanding the foregoing, in the event that
Purchaser shall acquire at least 80% of each of the Company Common Stock and
Company Preferred Stock, the parties hereto agree, at the request of Purchaser,
to take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 1924(b)(1)(ii) of the PBCL, as soon as
reasonably practicable after such acquisition, without a meeting of the
shareholders of the Company.
Section 6.10. Proxy Statement. If required under applicable law, the
---------------
Company and Parent shall prepare the Proxy Statement, file it with the SEC under
the Exchange Act as promptly as practicable after Purchaser purchases Company
Common Stock and/or Company Preferred Stock pursuant to the Offer, and use all
reasonable efforts to have it cleared by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the shareholders of the Company as of the record date for
the Shareholder Meeting.
Section 6.11. Public Announcements. Parent and the Company shall to the
--------------------
fullest extent practicable consult with each other before issuing any press
release or otherwise making any public statement with respect to the Offer, the
Merger and the other Transactions and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by law.
-46-
Section 6.12. Shareholder Litigation. The Company shall give Parent the
----------------------
opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and its directors relating to any of the
Transactions until the purchase of Securities pursuant to the Offer, and
thereafter, shall give Parent the opportunity to direct the defense of such
litigation and, if Parent so chooses to direct such litigation, Parent shall
give the Company and its directors an opportunity to participate in such
litigation; provided, however, that no such settlement shall be agreed to
without Parent's consent, which consent shall not be unreasonably withheld; and
provided further that no settlement requiring a payment by a director shall be
agreed to without such director's consent.
Section 6.13. FIRPTA. The Company shall deliver to Purchaser prior to the
------
expiration of the Offer a certified statement, prepared in accordance with
Sections 897 and 1445 of the Code, that the Securities are not "United States
real property interests" within the meaning of Section 897 of the Code.
Section 6.14. Redemption of Company Preferred Stock. Upon the occurrence of
-------------------------------------
a Trigger Event (as defined in the Tender and Option Agreement), or the
occurrence and continued existence of circumstances that would give Parent or
Purchaser the right to terminate this Agreement in circumstances where a
Termination Fee is paid or payable pursuant to Section 8.3, at the request of
Parent by written notice, the Company shall within two business days of such
notice deliver to the holders of Company Preferred Stock a notice of redemption
of such shares pursuant to Article Fifth of the Company's Articles of
Incorporation and take all other actions necessary to redeem such shares.
Section 6.15. Foreign Subsidiaries. Immediately prior to the consummation
--------------------
of the Offer, Purchaser shall have the right to cause such of its affiliates as
it shall select to purchase any or all of the non-United States subsidiaries of
the Company and, if Purchaser so elects, the Company shall sell or otherwise
cause such subsidiaries to be sold to such affiliates of Purchaser on such terms
and in such manner as Purchaser shall select provided that (a) such purchase and
sale transactions do not have an adverse effect on the Company and (b) no such
transactions will be deemed to constitute a breach of any representation,
warranty or covenant of the Company in this Agreement.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1. Conditions to Each Party's Obligation to Effect the Merger.
----------------------------------------------------------
The respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) if required by the PBCL, this Agreement shall have been
approved by the requisite affirmative vote of the shareholders of the Company in
accordance with applicable law;
-47-
(b) no statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated, or enforced by any
court or Governmental Entity which is in effect and has the effect of
prohibiting the consummation of the Merger; and
(c) the waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act, if any, shall have expired
or been terminated, and (x) in the case of the Company's obligations, all other
governmental consents, orders and approvals legally required for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time, except where the failure
to obtain any such consent would not reasonably be expected to subject any
officer, director, employee or shareholder of the Company to civil or criminal
liability in respect of the failure to obtain such consent, and (y) in the case
of Parent's and Purchaser's obligations, all other governmental consents, orders
and approvals legally required for the consummation of the Merger and the
transactions contemplated hereby (including merger control clearance by the
German Federal Cartel Office under the GWB Act) shall have been obtained and be
in effect at the Effective Time, except where the failure to obtain any such
consent would not reasonably be expected to have a Material Adverse Effect on
the Company or Parent, or materially impede the operation or use of any of the
Company's assets or business after the Closing.
Section 7.2. Conditions to Obligations of Parent and Purchaser to Effect
-----------------------------------------------------------
the Merger. The obligations of Parent and Purchaser to effect the Merger are
----------
further subject to the satisfaction or waiver pursuant to Section 1.1, prior to
the Effective Time, of the condition that Purchaser shall have accepted for
payment and paid for Securities tendered pursuant to the Offer.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.1. Termination. This Agreement may be terminated and the Merger
-----------
contemplated hereby may be abandoned at any time (notwithstanding approval
thereof by the shareholders of the Company) prior to the Effective Time:
(a) by mutual written consent duly authorized by the Boards
of Directors of the Company, Parent and Purchaser;
(b) by Parent, Purchaser or the Company if any court of
competent jurisdiction or other Governmental Entity shall have issued a final
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the consummation of the Offer or the Merger and such
order, decree or ruling or other action is or shall have become nonappealable;
(c) by Parent or Purchaser, if due to an occurrence or
circumstance which would result in the occurrence and continued existence of any
of the conditions set forth in Annex A hereto, Purchaser shall have (i) failed
to commence the Offer within the time required by Regulation 14D under the
Exchange Act, (ii) terminated the Offer without purchasing any Securities
pursuant to the Offer or (iii) failed to accept for payment Securities pursuant
to the Offer prior to May 31, 2000;
-48-
(d) by the Company (i) if there shall not have been and be
continuing a material breach of any representation, warranty, covenant or
agreement on the part of the Company, and Purchaser shall have (A) failed to
commence the Offer within the time required by Regulation 14D under the Exchange
Act, (B) subject to Section 1.1(e), terminated the Offer without purchasing all
the Securities validly tendered and not withdrawn pursuant to the Offer, or (C)
subject to Section 1.1(e), failed to accept for payment Securities pursuant to
the Offer prior to May 31, 2000, or (ii) prior to the purchase of Securities
pursuant to the Offer, concurrently with the execution of a definitive
acquisition agreement under the circumstances permitted by Section 6.1 provided,
that such termination under this clause (ii) shall not be effective unless (x)
the Company and its Board of Directors shall have complied in all material
respects with all their obligations under Section 6.1 and the Company shall have
paid the Termination Fee pursuant to Section 8.3 and (y) the Company shall have
provided Parent and Purchaser with at least five business days' prior written
notice prior to terminating this Agreement, which notice shall be accompanied by
(1) a copy of the proposed definitive acquisition agreement with respect to the
Superior Proposal that the Company proposes to accept and (2) the Company's
written certification that it has made the determinations with respect to such
Superior Proposal set forth in clauses (A) and (B) of the proviso in Section
6.1(b) and (3) the representation that the Company will, in the absence of any
other Superior Proposal, execute such a definitive acquisition agreement unless
Parent or Purchaser modify the Offer or this Agreement such that the Company's
Board of Directors determines that the Offer and the Merger (as so modified) are
at least as favorable as such Superior Proposal;
(e) by Parent or Purchaser prior to the purchase of
Securities pursuant to the Offer, if (i) any representations and warranties of
the Company contained in this Agreement which are qualified by materiality shall
not be true and correct at any time prior to the acceptance for payment of
Securities pursuant to the Offer (without regard to any knowledge qualifications
therein), or the representations and warranties of the Company contained in this
Agreement which are not qualified by materiality shall not be true and correct
in any material respect at any time prior to the acceptance for payment of
Securities pursuant to the Offer (without regard to any knowledge qualifications
therein) (other than to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall not be true and correct as of such date), or (ii) the Company shall not
have performed and complied with, in all material respects (without reference to
any materiality qualifications therein), each covenant or agreement contained in
the Agreement and required to be performed or complied with by it, and which
breach, in the case of clause (i) and (ii) above, shall not have been cured
prior to the earlier of (A) 10 business days following notice of such breach to
the Company by Parent or Purchaser and (B) May 31, 2000; provided, however, that
the Company shall have no right to cure and Parent and Purchaser may immediately
terminate this Agreement in the event that such breach by the Company was
willful, in the event of a material breach of Section 6.1 (whether or not
willful), or in the event that such breach is not reasonably capable of being
cured within such period of time or (iii) the Board of Directors of the Company
or any committee thereof shall have withdrawn, or modified, amended or changed
(including by amendment of the Schedule 14D-9) in a manner adverse to Parent or
Purchaser its approval or recommendation of the Offer, the Merger, any of the
Transactions or this Agreement, or shall have approved or recommended to the
Company's stockholders an Acquisition Proposal or any other acquisition of
Securities other than the Offer and the Merger, or shall have adopted any
resolutions to effect any of the foregoing or (iv) the Board of Directors
-49-
of the Company shall have failed to publicly reaffirm their approval or
recommendation of the Offer, the Merger, the Transactions or this Agreement
within two business days following Parent's or Purchaser's written request to do
so;
(f) by the Company prior to the purchase of any Securities pursuant to
the Offer if (i) there shall have been a material breach of any representation
or warranty in this Agreement on the part of Parent or Purchaser which
materially adversely affects (or materially delays) the consummation of the
Offer or the Merger or (ii) Parent or Purchaser shall not have performed or
complied with, in all material respects (without reference to any materiality
qualifications therein), each covenant or agreement contained in this Agreement
and required to be performed or complied with by them, and such breach
materially adversely affects the Company, its stockholders generally or its
employees generally or which materially adversely affects (or materially delays)
the consummation of the Offer or the Merger, and which breach, in the case of
both clause (i) and clause (ii) above, shall not have been cured prior to the
earlier of (A) 10 business days following notice of such breach to Parent and
Purchaser by the Company and (B) May 31, 2000; provided, however, that Parent
and Purchaser shall have no right to cure such breach and the Company may
immediately terminate this Agreement in the event that such breach by Parent or
Purchaser was willful or in the event such breach is not reasonably capable of
being cured within such period of time;
(g) by Parent or Purchaser prior to the purchase of Securities
pursuant to the Offer if any person or group (which includes a "person" or
"group" as such terms are defined in Section 13(d)(3) of the Exchange Act) other
than Parent, Purchaser, any of their affiliates, or any group of which any of
them is a member, shall have acquired beneficial ownership of more than 20% of
the outstanding shares of Company Common Stock or Company Preferred Stock or
shall have consummated or entered into a definitive agreement or an agreement in
principle to consummate an Acquisition Proposal or if any person or group which,
prior to the date of this Agreement, had a Schedule 13D or 13G on file with the
SEC shall have acquired or proposed to acquire beneficial ownership of
additional shares of any class or series of capital stock of the Company,
through the acquisition of stock, the formation of a group or otherwise,
constituting 10% or more of any such class or series, or shall have been granted
any option, right or warrant, conditional or otherwise, to acquire beneficial
ownership of additional shares of any class or series of capital stock of the
Company (including the Company Common Stock and Company Preferred Stock)
constituting 10% or more of any such class or series (it being understood that
the execution of the Tender and Option Agreement by the Company stockholders
that are parties thereto and the performance of their obligations thereunder
shall not, in itself, be deemed to constitute such an acquisition of beneficial
ownership triggering this provision); or
(h) by Parent or Purchaser if the Company or any shareholder or
shareholders party to the Tender and Option Agreement who beneficially own,
individually or in the aggregate, 10% of the Fully Diluted Voting Power or 10%
of the Fully Diluted Shares shall have breached in any material respect any of
its or their obligations under the Tender and Option Agreement and such breach
shall not have been cured, provided that there shall be no right to cure in
respect of breaches that are not reasonably capable of cure (which shall
include, without limitation, breaches of Sections 5, 8 or 9 of the Tender and
Option Agreement).
-50-
Section 8.2. Effect of Termination. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 8.1, this Agreement, except
for the provisions of Sections 6.3, 8.2, 8.3, 9.3, 9.4 and 9.7, shall forthwith
become void and have no effect, without any liability on the part of any party
or its affiliates, directors, officers or shareholders except as provided in
Sections 8.3 and 9.3 of this Agreement. Notwithstanding anything herein to the
contrary, to the extent the Company then owes Parent a Termination Fee (as
defined herein) pursuant to the provisions of Section 8.3 hereof at the time of
such termination, termination by the Company pursuant to Section 8.1 shall not
be effective unless prior to or simultaneously therewith such Termination Fee is
paid to the Parent.
Section 8.3. Expenses; Termination Fee.
-------------------------
(a) Except as provided in Section 8.3(b), (c) and (d) of this
Agreement, all fees and expenses incurred by the parties hereto shall be borne
solely and entirely by the party which has incurred such fees and expenses (it
being understood that the filing fees under the HSR Act and under the GWB Act
shall be borne by Purchaser).
(b) If:
(i) (x) Parent or Purchaser terminates this Agreement
pursuant to Section 8.1(c) or the Company terminates this Agreement pursuant to
Section 8.1(d)(i), in either case, in circumstances when, prior to such
termination any third party shall have acquired beneficial ownership of 20% or
more of the outstanding shares of Company Common Stock or Company Preferred
Stock (or any person or group with a Schedule 13D or 13G on file with the SEC
(including the stockholders party to the Tender and Option Agreement except as
expressly permitted in that agreement) shall have acquired beneficial ownership
of additional shares of any class or series of capital stock of the Company
(including Company Common Stock and Company Preferred Stock), through the
acquisition of stock, the formation of a group or otherwise, constituting 10% or
more of any such class or series (it being understood that the execution of the
Tender and Option Agreement by the Company stockholders that are parties thereto
and the performance of their obligations thereunder shall not, in itself, be
deemed to constitute such an acquisition of beneficial ownership triggering this
provision)) or shall have made or consummated or announced an intention to make
or consummate an Acquisition Proposal (or with respect to any proposal that may
be existing on the date hereof, not withdrawn such Acquisition Proposal) or (y)
Parent or Purchaser terminates this Agreement pursuant to Section 8.1(g), and,
in any such case described in clauses (x) or (y) in this Section 8.3(b)(i),
within 12 months after such termination the Company or any of its subsidiaries
enters into or publicly announces an intention to enter into a definitive
agreement with respect to an Acquisition Proposal, or consummates or publicly
announces an intention to consummate an Acquisition Proposal;
(ii) Parent or Purchaser terminates this Agreement
pursuant to (x) clauses (i) or (ii) of Section 8.1(e) as a result of a willful
breach of this Agreement by the Company or any material breach of Section 6.1
(whether or not willful), (y) clauses (iii) or (iv) of Section 8.1(e) or (z)
Section 8.1(h);
-51-
(iii) the Company terminates this Agreement pursuant to
Section 8.1(d)(ii); or
(iv) the Company terminates this Agreement pursuant to
Section 8.1(f) in circumstances when Parent or Purchaser shall also have the
right to terminate this Agreement pursuant to the circumstances described in
Section 8.3(b)(i) or 8.3(b)(ii);
then, in each case, the Company shall pay to Parent, within two business days
following the execution and delivery of such agreement or such occurrence, as
the case may be, or prior to or simultaneously with such termination by the
Company as contemplated by 8.3(b)(i), (iii) or (iv), a fee, in cash, of $5.5
million (a "Termination Fee"); provided, that the Company in no event shall be
obligated to pay more than one such Termination Fee with respect to all such
agreements and occurrences and such termination. Any payment required to be made
pursuant to this subsection (b) shall be made to Parent by wire transfer of
immediately available funds to an account designated by Parent. The provisions
of this Section 8.3 shall not derogate from any other rights or remedies which
Parent or Purchaser may possess under this Agreement (including as provided in
Section 9.3) or under applicable law, and the payment of the Termination Fee
shall not be deemed to constitute liquidated damages.
(c) If this Agreement is terminated as a result of a breach of
this Agreement by any party hereto and such breach is not a willful and material
breach by the breaching party or a material breach by the Company of Section
6.1, such breaching party shall have no liability to the non-breaching party (or
parties) under this Agreement except that: (i) no such breach shall relieve the
obligation of the Company to pay the Termination Fee if it is otherwise payable
pursuant to Section 8.3(b); (ii) no such breach shall affect the rights provided
to Parent or Purchaser pursuant to Section 9.3 to the extent available; and
(iii) the breaching party, irrespective of whether the breach is willful, shall
be responsible for the Expenses (as hereinafter defined) of the non-breaching
party (or parties), except with respect to a Specified Breach (as hereinafter
defined) as to which there shall be no liability. The parties acknowledge and
agree that no such limitation of liability or any other limitation of liability
shall apply to breaches which are willful and material or a material breach by
the Company of Section 6.1.
For purposes hereof:
"Expenses" shall mean the reasonable documented out of pocket costs
--------
and expenses (not to exceed an aggregate maximum of $3.0 million) incurred by
the non-breaching party (or parties) and its affiliates with respect to or
arising out of the negotiation and execution of this Agreement, the Tender and
Option Agreement, the Confidentiality Agreement and the performance of the
Transactions, including all fees and expenses of counsel, accountants,
investment bankers, printers, experts and consultants and travel expenses,
disbursements and other external or internal out of pocket costs or expenses.
"Specified Breach" shall mean a breach of a representation or warranty
----------------
contained in this Agreement (i) first occurring after the date hereof, (ii)
caused by an event or circumstance first occurring after the date hereof outside
of the breaching party's control, direction and ability to cure, and (iii) in
respect of which the breaching party had no knowledge of the likelihood of
-52-
occurrence prior to the date hereof (e.g., an act of God). A Specified Breach
shall not include, in any event, a material breach of a representation or
warranty as of the date of this Agreement.
(d) The Termination Fee shall not be refundable or subject to
offset or any other claim by the Company, provided that (i) if the Company shall
have paid any Expenses to Parent or Purchaser pursuant to Section 8.3(c), the
amount of such Expenses which have been so paid shall be credited against the
amount of any Termination Fee which is thereafter due and payable to Parent or
Purchaser pursuant to Section 8.3, (ii) if the Company shall have paid any
Termination Fee to Parent or Purchaser pursuant to Section 8.3, the amount of
such Termination Fee which has been so paid shall be credited against the amount
of any Expenses which thereafter are due and payable to Parent or Purchaser
pursuant to Section 8.3(c) and (iii) in connection with any suit or claim for
monetary damages brought by Parent or Purchaser with respect to a breach of this
Agreement by the Company, the amount of the Termination Fee paid by the Company,
if any, shall be credited against the amount of any monetary damages suffered by
Parent or Purchaser which the Company otherwise would be responsible for with
respect to such suit or claim.
Section 8.4. Amendment. To the extent permitted by applicable law, this
---------
Agreement may be amended by action taken by or on behalf of the Boards of
Directors of the Company, Parent and Purchaser at any time before or after
approval of this Agreement by the shareholders of the Company but, after any
such shareholder approval, no amendment shall be made that by law requires the
further approval of such shareholders without the approval of such shareholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
Section 8.5. Extension; Waiver. At any time prior to the Effective Time, a
-----------------
party may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties of the other parties contained herein or in any
documents, certificate or writing delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions of the other parties hereto
contained herein; provided that after the approval of the Merger by the
shareholders of the Company, no extensions or waivers shall be made that by law
require further approval by such shareholders without the approval of such
shareholders. Any agreement on the part of any party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Non-Survival of Representations and Warranties. None of the
----------------------------------------------
representations and warranties made in this Agreement shall survive after the
Effective Time. This Section 9.1 shall not limit any covenant or agreement of
the parties hereto which by its terms contemplates performance after the
Effective Time.
Section 9.2. Entire Agreement; Assignment. This Agreement (including the
----------------------------
Company Disclosure Schedule), the Tender and Option Agreement and, to the extent
contemplated in
-53-
Section 6.3(b), the Confidentiality Agreement, (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof and
(b) shall not be assigned by operation of law or otherwise, provided that Parent
or Purchaser may assign any of their rights and obligations to any direct or
indirect wholly owned subsidiary of Parent, but no such assignment shall relieve
Parent or Purchaser of its obligations hereunder. Any of Parent, Purchaser or
any direct or indirect wholly owned subsidiary of Parent may purchase Securities
under the Offer. Any attempted assignment in violation of this Section 9.2 shall
be void. Subject to the preceding sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
Section 9.3. Enforcement of the Agreement. The Company agrees that
----------------------------
irreparable damage would occur to Parent and Purchaser in the event that any of
the provisions of this Agreement were not performed by the Company in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that Parent and Purchaser shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any federal or state court located in the State of New York
(as to which the parties agree to submit jurisdiction of the purposes of such
action), this being in addition to any other remedy to which they are entitled
at law or in equity including those set forth in Section 8.3 of this Agreement.
The Company further agrees to waive any requirement for the securing or posting
of any bond in connection with obtaining any such injunction or other equitable
relief.
Section 9.4. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that Transactions contemplated hereby are fulfilled to the extent possible. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
Section 9.5. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given upon receipt if
delivered personally, mailed by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
or sent by electronic transmission to the telecopier number specified below (or
at such other address or telecopy number of a party as shall be specified by
like notice):
if to Parent or Purchaser:
Siemens Energy & Automation, Inc.
0000 Xxx Xxxxxx Xxxxxxx
-00-
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
with a copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Telecopy: 000-000-0000
if to the Company:
Xxxxx Products Co.
0000 Xxxxxxxxxx Xxx.
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopy: 000-000-0000
with a copy to:
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx xxx Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx.
Xxxxx X. Xxxxxx
Telecopy: 000-000-0000
Notice given by telecopier shall be deemed received on the day the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee. Notice given by mail as set out above shall be deemed
received three days after the date the same is postmarked.
Section 9.6. Failure or Indulgence Not Waiver; Remedies Cumulative. No
-----------------------------------------------------
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right.
Section 9.7. Governing Law; Consent to Jurisdiction. Except for the PBCL
--------------------------------------
as it relates to the Transactions, this Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
regardless of the laws that might otherwise govern
-55-
under principles of conflicts of laws applicable thereto. In addition, the
Company, Parent and Purchaser hereby (i) consent to submit to the personal
jurisdiction of the United States District Court for the Southern District of
New York or the Supreme Court of the State of New York, New York in the event
any dispute arises out of this Agreement or any of the Transactions, (ii) agree
not to attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) subject to the terms of the Tender
and Option Agreement, agree not to bring any action relating to this Agreement
or any of the Transactions in any court other than the United States District
Court for the Southern District of New York or the Supreme Court of the State of
New York, New York and (iv) waive any right to trial by jury with respect to any
claim or proceeding related to or arising out of this Agreement or any of the
Transactions. In furtherance of the foregoing, the Company, Parent and Purchaser
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
Transactions in the courts of the United States District Court for the Southern
District of New York or the Supreme Court of the State of New York, New York,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.8. Descriptive Headings. The descriptive headings herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.9. Parties in Interest. This Agreement shall be binding upon and
-------------------
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 9.10. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.11. Certain Definitions. For purposes of this Agreement
-------------------
(including Annex I hereto), the following terms shall have the meanings ascribed
to them below:
(a) "affiliate" of a person shall mean (i) a person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first-mentioned person and
(ii) an "associate", as that term is defined in Rule 12b-2 promulgated under the
Exchange Act as in effect on the date of this Agreement.
(b) "beneficial owner" (including the term "beneficially own"
or correlative terms) shall have the meaning ascribed to such term under Rule
13d-3(a) under the Exchange Act.
(c) "business day" shall have the meaning ascribed to such
term under Rule 14d-1 of the Exchange Act.
(d) "Company Disclosure Schedule" shall mean a letter dated
the date of the Agreement delivered by the Company to Parent and Purchaser
concurrently with the
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execution of the Agreement, which, among other things, shall identify exceptions
to the Company's representations and warranties contained in Article III and
covenants contained in Article V by specific section and subsection references.
(e) "control" (including the terms "controlling," "controlled
by" and "under common control with" or correlative terms) shall mean the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management and policies of a person,
whether through ownership of voting securities or as trustee or executor, by
contract or credit arrangement, or otherwise.
(f) "Fully Diluted Shares" means all outstanding shares of
Company Common Stock on a fully diluted basis, after giving effect to the
exercise and conversion of all outstanding options (including the Options
(whether or not currently exercisable)), warrants and securities exercisable or
convertible (but excluding shares of Company Preferred Stock) into Company
Common Stock; provided, that Parent may, at its option exercisable in its sole
--------
discretion, exclude at any time from the above calculation any or all Options
(whether or not currently exercisable).
(g) "Fully Diluted Voting Power" means the voting power
represented by all of the outstanding Securities entitled generally to vote at
the Shareholder Meeting on a fully diluted basis, after giving effect to the
exercise of all outstanding options (including the Options (whether or not
currently exercisable)), warrants and securities exercisable or convertible into
such voting securities, except that outstanding shares of Company Preferred
Stock shall not be treated as having been converted into shares of Company
Common Stock, with each share of Company Common Stock having one vote per share
and each share of Company Preferred Stock having five votes per Share; provided,
--------
that Parent may, at its option exercisable in its sole discretion, exclude at
----
any time from the above calculation any or all Options (whether or not currently
exercisable).
(h) "group" shall have the meaning ascribed to such term
under Rule 13d-3(a) under the Exchange Act.
(i) "Material Adverse Effect" shall mean (i) any adverse
change or effect in the condition (financial or otherwise), assets, liabilities,
business, properties, results of operations or prospects of a specified person
or its subsidiaries, which change or effect is material, individually or in the
aggregate with any other changes or effects, to the specified person and its
subsidiaries taken as a whole, or (ii) any event, matter, condition or effect
which materially impairs the ability of a specified person to perform on a
timely basis its obligations under this Agreement, the Tender and Option
Agreement, or the consummation of the Transactions.
(j) "person" shall mean a natural person, company,
corporation, partnership, association, trust or any unincorporated organization.
(k) "subsidiary" shall mean, when used with reference to a
person means any corporation or other business entity of which such person
directly or indirectly owns (i) the majority of the outstanding voting
securities or (ii) voting securities or equity interests
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which give such person the power to elect a majority of the board of directors
or similar governing body of such entity.
Section 9.12. Interpretation. (a) The words "hereof," "herein" and
--------------
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument, statute or rule defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument, statute
or rule as from time to time amended, modified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes and rules) by succession of comparable successor statutes and rules and
all attachments thereto and instruments incorporated therein. References to a
person are also to its permitted successors and assigns.
(b) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, on the day and
year first above written.
SIEMENS ENERGY & AUTOMATION, INC.
By: /s/ Xxxxxx X Xxxxxx
-------------------------------
Name: Xxxxxx X Xxxxxx
Title: President and CEO
MALIBU ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer
XXXXX PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Secretary and Treasurer
-59-
ANNEX A
to
Agreement and Plan of Merger
----------------------------
Conditions to the Offer. Notwithstanding any other provision of the
Offer or the Merger Agreement, in addition to (and not in limitation of)
Purchaser's rights pursuant to the Agreement to extend and amend the Offer in
accordance with the Merger Agreement, Purchaser shall not be required to accept
for payment or, subject to Rule 14e-1(c) of the Exchange Act, pay for and may
delay the acceptance for payment of or, subject to Rule 14e-1(c) of the Exchange
Act, the payment for, any Securities not theretofore accepted for payment or
paid for, and Purchaser may terminate or amend the Offer (subject to Section 1.1
of the Merger Agreement) if in the sole judgment of Purchaser (i) a number of
Securities representing at least a majority of (x) the Fully Diluted Voting
Power and (y) (A) the outstanding shares of Company Preferred Stock and (B) the
Fully Diluted Shares, shall not have been validly tendered and not withdrawn
immediately prior to the expiration of the Offer or otherwise acquired by Parent
or any of its affiliates prior to the expiration of the Offer ("Minimum
Condition"), (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated or (iii) at any time on or after the date of the
Merger Agreement and prior to the time of acceptance of such Securities for
payment or the payment therefor, any of the following conditions has occurred
and continues to exist:
(a) any representations and warranties of the Company in the Agreement
which are qualified by materiality shall not be true and correct (determined
without regard to any knowledge qualifications therein) as of such time, or the
representations and warranties of the Company in the Agreement which are not
qualified by materiality shall not be true and correct (determined without
regard to any knowledge qualifications therein) in any material respect, as of
such time (other than to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall not be true and correct as of such date) and which breach shall
not have been cured prior to the earlier of (i) 10 business days following
notice of such breach and (ii) May 31, 2000; provided, however, that the Company
shall have no right to cure such breach in the event that such breach by the
Company was willful or in the event such breach is not reasonably capable of
being cured within such period of time;
(b) the Company shall not have performed and complied with, in all
material respects (without reference to any materiality qualifications therein),
each covenant or agreement contained in the Agreement and required to be
performed or complied with by it and which breach shall not have been cured
prior to the earlier of (i) 10 business days following notice of such breach and
(ii) May 31, 2000; provided, however, that the Company shall have no right to
cure such breach in the event that such breach by the Company was willful, if
such breach involves a material breach of Section 6.1 of the Agreement (whether
or not such breach was willful) or in the event such breach is not reasonably
capable of being cured within such period of time;
(c) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange (excluding any coordinated trading halt triggered as a
result of a specified decrease in a market index), (ii)
any extraordinary or material adverse change in the financial markets in the
United States or the Federal Republic of Germany, (iii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or the Federal Republic of Germany by any Governmental Entity,
(iv) any mandatory limitation, by any Governmental Entity on, or other event
that materially affects, the extension of credit by banks or other lending
institutions, (v) a commencement of a war, armed hostilities or other national
or international calamity directly or indirectly involving the United States or
the Federal Republic of Germany which could reasonably be expected to have a
Material Adverse Effect on the Company or materially adversely affect or delay
the consummation of the Offer, (vi) any material adverse change in United States
or the Federal Republic of Germany currency exchange rates or a suspension of,
or limitation on, the markets therefor, (vii) in the case of any of the
foregoing existing on the date of the Agreement, a material acceleration or
worsening thereof, or (viii) a decline in the Standard & Poor's Index of 500
Industrial Companies by an amount in excess of 25%, measured from the close of
business on the date of the Merger Agreement;
(d) there shall be threatened or pending any suit, action, or
proceeding by any Governmental Entity, or by any other person which has a
reasonable possibility of success, (i) challenging the acquisition by Parent or
Purchaser of the Securities, seeking to make illegal, materially delay, make
materially more costly or otherwise directly or indirectly restrain or prohibit
the making or consummation of the Offer and the Merger or the performance of any
of the other Transactions or seeking to obtain from the Company, Parent or
Purchaser any damages that are material in relation to the Company and its
subsidiaries taken as whole, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries or affiliates of any of the businesses or assets of the Company,
Parent or any of their respective subsidiaries or affiliates, or to compel the
Company, Parent or any of their respective subsidiaries or affiliates to dispose
of or hold separate any of the material businesses or assets of the Company,
Parent or any of their respective subsidiaries or affiliates, as a result of the
Offer, the Merger or any of the other Transactions, (iii) seeking to impose
material limitations on the ability of Parent or Purchaser to acquire or hold,
or exercise full rights of ownership of, any Securities accepted for payment
pursuant to the Offer including, without limitation, the right to vote the
Securities accepted for payment by it on all matters properly presented to the
shareholders of the Company, (iv) seeking to prohibit Parent or any of its
subsidiaries or affiliates from effectively controlling in any material respect
the business or operations of the Company or its subsidiaries, (v) requiring
divestiture by Purchaser or any of its affiliates of any Securities or (vi)
which otherwise is reasonably likely to have a Material Adverse Effect on the
Company or Parent;
(e) there shall be any statute, rule, regulation, judgment, order or
injunction (including with respect to competition or antitrust matters) enacted,
entered, enforced, promulgated or issued, or any statute, rule or regulation
which has been proposed by the relevant legislative or regulatory body and is
reasonably likely to be enacted, with respect to or deemed applicable to, or any
material consent or approval withheld or any other action shall be taken with
respect to (i) Parent, the Company or any of their respective subsidiaries or
affiliates or (ii) the Offer or the Merger or any of the other Transactions by
any Governmental Entity or court, including without limitation any required
approvals or waiting periods under the GWB Act and the HSR Act, other than
applicable waiting periods under the HSR Act as specified in the introductory
paragraph above, that has resulted or is reasonably likely to result, directly
or
-2-
indirectly, in any of the consequences referred to in clauses (i) though (vi) of
paragraph (d) above;
(f) since the date of the Agreement there shall have occurred any
events, changes, effects or developments that, individually or in the aggregate,
have had or are reasonably likely to have, a Material Adverse Effect on the
Company;
(g) (i) the Board of Directors of the Company or any other committee
thereof shall have (A) withdrawn, or modified, amended or changed (including by
amendment of the Schedule 14D-9) in a manner materially adverse to Parent or
Purchaser; its approval or recommendation of the Offer, the Merger Agreement and
the Merger or any of the other Transactions, (B) approved or recommended to the
Company's stockholders an Acquisition Proposal or any other acquisition of
Securities other than the Offer and the Merger, or (C) adopted any resolution to
effect any of the foregoing, or (ii) the Board of Directors of the Company shall
have failed to publicly reaffirm their approval or recommendation of the Offer,
the Merger, the Transactions or this Agreement within two business days
following Parent's or Purchaser's written request to do so;
(h) the Merger Agreement shall have been terminated in accordance with
its terms;
(i) any person or group (which includes a "person" or "group" as such
terms are defined in Section 13(d)(3) of the Exchange Act) other than Parent,
Purchaser, any of their affiliates, or any group of which any of them is a
member, shall have acquired beneficial ownership of more than 20% of the
outstanding shares of Company Common Stock or Company Preferred Stock or shall
have consummated or entered into a definitive agreement or an agreement in
principle to consummate an Acquisition Proposal or if any person or group which,
prior to the date of the Merger Agreement, had a Schedule 13D or 13G on file
with the SEC shall have acquired or proposed to acquire beneficial ownership of
additional shares of any class or series of capital stock of the Company,
through the acquisition of stock, the formation of a group or otherwise,
constituting 10% or more of any such class or series, or shall have been granted
any option, right or warrant, conditional or otherwise, to acquire beneficial
ownership of additional shares of any class or series of capital stock of the
Company (including the Company Common Stock and Company Preferred Stock)
constituting 10% or more of any such class or series (it being understood that
the execution of the Tender and Option Agreement by the Company stockholders
that are parties thereto shall not, in itself, be deemed to constitute such an
acquisition of beneficial ownership triggering this provision);
(j) the Company or any shareholder or shareholders beneficially
owning, indirectly or in the aggregate, more than 10% of the Fully Diluted
Voting Power or 10% of the Fully Diluted Shares shall have breached in any
material respect any of its or their obligations under the Tender and Option
Agreement;
(k) (i) all consents and approvals of and notices to or filings with
Governmental Entities and third parties required in connection with the Offer,
the Merger and any of the other Transactions shall not have been obtained or
made other than those the absence of which, individually or in the aggregate,
would not have a Material Adverse Effect or prevent
-3-
or materially delay consummation of any of the Offer, the Merger or any of the
other Transactions, or (ii) all consents and approvals of third parties required
in connection with the Offer, the Merger and any of the other Transactions and
listed on Schedule 3.7 of the Company Disclosure Schedule shall not have been
obtained or made;
(l) the Company shall not have provided Parent and Purchaser with
documentation reasonably acceptable to them demonstrating the percentage
ownership of the outstanding capital stock or equity interests of its
subsidiaries listed on Section 3.1(b) of the Company Disclosure Schedule (other
than Malibu (Pty.) Ltd. South Africa) or all charters and bylaws or other
organizational documents of such subsidiaries which are reasonably satisfactory
to Parent and Purchaser; or
(m) the Company shall not have completed in all material respects all
obligations and activities required of it under the Connecticut Property
Transfer Law, including in connection with the Offer, the Merger and any of the
other Transactions, or Parent or Purchaser reasonably determines that any
remaining obligations under the Connecticut Property Transfer Law would have a
Material Adverse Effect on the Company;
which, in the sole judgment of Purchaser, in any such case, and regardless of
the circumstances giving rise to any such condition (including any action or
inaction by Parent or any of its affiliates), makes it inadvisable to proceed
with the Offer or with such acceptance for payment, purchase of, or payment for
Securities.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition and may be waived by Purchaser
or Parent, in whole or in part, at any time and from time to time, in the sole
discretion of Purchaser or Parent. The failure by Purchaser or Parent or any of
their respective affiliates at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver with
respect to any other facts and circumstances and each right will be deemed an
ongoing right which may be asserted at any time and from time to time.
-4-
