Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
among
E. I. DU PONT DE NEMOURS AND COMPANY,
PURPLE ACQUISITION CORPORATION
and
CHEMFIRST INC.
Dated as of July 23, 2002
TABLE OF CONTENTS
Page
ARTICLE I
The Merger
SECTION 1.01. The Merger.................................................................................1
SECTION 1.02. Closing ...................................................................................1
SECTION 1.03. Effective Time.............................................................................2
SECTION 1.04. Effects of the Merger......................................................................2
SECTION 1.05. Articles of Incorporation and By-laws......................................................2
SECTION 1.06. Directors..................................................................................2
SECTION 1.07. Officers...................................................................................2
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock....................................................................2
SECTION 2.02. Exchange of Certificates...................................................................3
SECTION 2.03. Adjustment to Merger Consideration.........................................................5
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company..............................................5
SECTION 3.02. Representations and Warranties of Parent and Sub..........................................23
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business.......................................................................25
SECTION 4.02. No Solicitation...........................................................................30
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement........................................................32
SECTION 5.02. Company Shareholders Meeting..............................................................33
SECTION 5.03. Access to Information.....................................................................33
SECTION 5.04. Reasonable Best Efforts...................................................................34
SECTION 5.05. Employee Matters..........................................................................34
SECTION 5.06. Stock Based Awards........................................................................36
SECTION 5.07. Fees and Expenses; Termination Fee........................................................37
SECTION 5.08. Indemnification, Exculpation and Insurance................................................38
SECTION 5.09. Shareholder Litigation....................................................................39
SECTION 5.10. Rights Agreement..........................................................................39
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To Effect the Merger................................39
SECTION 6.02. Conditions to Obligations of Parent and Sub To Effect the Merger..........................39
SECTION 6.03. Conditions to Obligation of the Company To Effect the Merger..............................40
SECTION 6.04. Frustration of Closing Conditions.........................................................40
ARTICLE VII
Termination and Amendment
SECTION 7.01. Termination...............................................................................41
SECTION 7.02. Effect of Termination.....................................................................42
SECTION 7.03. Amendment.................................................................................42
SECTION 7.04. Extension; Waiver.........................................................................42
SECTION 7.05. Procedure for Termination, Amendment, Extension or Waiver.................................42
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties.............................................43
SECTION 8.02. Notices.................................................................................. 43
SECTION 8.03. Definitions; Interpretation...............................................................44
SECTION 8.04. Counterparts..............................................................................45
SECTION 8.05. Entire Agreement; No Third-Party Beneficiaries............................................45
SECTION 8.06. Governing Law.............................................................................45
SECTION 8.07. Publicity.................................................................................45
SECTION 8.08. Assignment................................................................................46
SECTION 8.09. Enforcement...............................................................................46
SECTION 8.10. Severability..............................................................................46
ANNEX I - Index of Defined Terms
AGREEMENT AND PLAN OF MERGER
(this "Agreement") dated as of July 23,
2002, among E. I. DU PONT DE NEMOURS
AND COMPANY, a Delaware corporation
("Parent"), PURPLE ACQUISITION
CORPORATION, a Mississippi corporation
and a wholly owned subsidiary of Parent
("Sub"), and CHEMFIRST INC., a
Mississippi corporation (the
"Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, par
value $1.00 per share, of the Company ("Company Common Stock") not owned by
Parent, Sub or the Company will be converted into the right to receive
$29.20 in cash;
WHEREAS the respective Boards of Directors of Sub and the Company
have adopted this Agreement;
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent
and Sub to enter into this Agreement, Parent and a certain shareholder of
the Company are entering into a shareholder agreement (the "Shareholder
Agreement") pursuant to which, among other things, such shareholder has
agreed to vote to approve this Agreement and to take certain other actions
in furtherance of the Merger, upon the terms and subject to the conditions
set forth therein;
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
Mississippi Business Corporation Act (the "MBCA"), Sub shall be merged with
and into the Company at the Effective Time. Following the Merger, the
separate corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation") and
shall succeed to all the rights and obligations of Sub in accordance with
the MBCA.
SECTION 1.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second business day
following the satisfaction or waiver of the conditions set forth in Article
VI (other than those conditions that by their terms are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those
conditions), at the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza,
000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or
place is agreed to in writing by the parties.
SECTION 1.03. Effective Time. Prior to the Closing, the parties
shall prepare and execute articles of merger in accordance with Section
79-4-11.06(a) of the MBCA (the "Articles of Merger"), and as soon as
practicable on the Closing Date, the Surviving Corporation shall deliver
the Articles of Merger to the Secretary of State of the State of
Mississippi for filing in accordance with the relevant provisions of the
MBCA. The Merger shall become effective at such time as the Articles of
Merger are duly filed in accordance with Section 79-4-11.06(b) of the MBCA,
or at such other time as Parent and the Company shall agree and shall
specify in the Articles of Merger (the time the Merger becomes effective
being hereinafter referred to as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 79-4-11.07 of the MBCA.
SECTION 1.05. Articles of Incorporation and By-laws. (a) The
articles of incorporation of Sub, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The by-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation to
hold office until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be.
SECTION 1.07. Officers. The officers of Sub immediately prior to
the Effective Time shall be the officers of the Surviving Corporation to
hold office until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of
any shares of capital stock of the Company, Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
common stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Cancelation of Certain Stock. Each share of Company Common
Stock that is owned by the Company, as treasury stock, or by any direct or
indirect wholly owned subsidiary of the Company, or by Parent or Sub, in
each case immediately prior to the Effective Time, shall automatically be
canceled and retired and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares to be canceled in accordance with Section 2.01(b)) shall
be converted into the right to receive $29.20 in cash, without interest
(the "Merger Consideration"). At the Effective Time, all such shares shall
no longer be outstanding and shall automatically be canceled and shall
cease to exist, and each holder of a certificate that immediately prior to
the Effective Time represented any such shares (a "Certificate") shall
cease to have any rights with respect thereto, except the right to receive
the Merger Consideration. The right of any holder of any share of Company
Common Stock to receive the Merger Consideration shall be subject to and
reduced by the amount of any withholding that is required under applicable
tax law.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to
the Effective Time, Parent shall appoint a bank or trust company that is
reasonably satisfactory to the Company to act as paying agent (the "Paying
Agent") for the payment of the Merger Consideration. At or immediately
prior to the Effective Time, Parent shall deliver, or cause the Surviving
Corporation to deliver, to the Paying Agent immediately available funds in
the amount necessary for the payment of the Merger Consideration pursuant
to Section 2.01(c) upon surrender of Certificates (such funds, the
"Exchange Fund"). Subject to Section 2.02(d), the Paying Agent shall,
pursuant to irrevocable instructions, deliver the Merger Consideration out
of the Exchange Fund in accordance with this Article II. Except as
contemplated by this Article II, the Exchange Fund shall not be used for
any other purpose.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, Parent shall cause the Paying Agent to mail to each
holder of record of a Certificate (i) 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 which shall be in customary form and
contain customary provisions) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration.
Upon surrender of a Certificate for cancelation to the Paying Agent,
together with such letter of transmittal, duly completed and validly
executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor the amount of cash into which the shares formerly
represented by such Certificate shall have been converted pursuant to
Section 2.01(c), and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of shares that is not
registered in the stock transfer books of the Company, payment may be made
to a person other than the person in whose name the Certificate so
surrendered is registered if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such
payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such Certificate or
establish to the satisfaction of the Surviving Corporation that such tax
has been paid or is not applicable. No interest shall be paid or shall
accrue on the cash payable upon surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates 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 shares of Company Common Stock formerly
represented by such Certificates. At the close of business on the day on
which the Effective Time occurs, the stock transfer books of the Company
shall be closed, and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the shares of
Company Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, any Certificate is presented
to the Surviving Corporation for transfer or any other reason, it shall be
canceled against delivery of cash to the holder thereof as provided in this
Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation or Parent for payment of their claim for the Merger
Consideration.
(e) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of
any cash from the Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(f) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund as directed by Parent provided, however,
that any such investments shall be in (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency
or instrumentality thereof and having maturities of not more than one month
from the date of investment, (ii) certificates of deposit, eurodollar time
deposits and bankers' acceptances with maturities not exceeding one month
and overnight bank deposits with any commercial bank, depository
institution or trust company incorporated or doing business under the laws
of the United States of America, any state thereof or the District of
Columbia, provided that such commercial bank, depository institution or
trust company has, at the time of investment, (A) capital and surplus
exceeding $500,000,000 and (B) outstanding short-term debt securities which
are rated at least A-1 by Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or at least P-1 by Xxxxx'x Investors Services, Inc., (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clauses (i) and (ii) above entered
into with any financial institution meeting the qualifications specified in
clause (ii) above, (iv) commercial paper having a rating in the highest
rating categories from Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or Xxxxx'x Investors Services, Inc. and in each case
maturing within one month from the date of investment and (v) money market
mutual or similar funds having assets in excess of $1,000,000,000. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent, the posting by such person of a bond in such reasonable
and customary amount as Parent may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Paying
Agent shall deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect thereto.
(h) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable to any holder of Company
Common Stock pursuant to this Agreement such amounts as may be required to
be deducted and withheld with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code"), or under any
provision of state, local or foreign tax law. To the extent that amounts
are so withheld and paid over to the appropriate taxing authority by
Parent, the Surviving Corporation or the Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by Parent, the Surviving
Corporation or the Paying Agent.
SECTION 2.03. Adjustment to Merger Consideration. Without limiting
or in any way modifying the covenant of the Company set forth in Section
4.01(a)(i), in the event that, prior to the Effective Time, the outstanding
shares of Company Common Stock are changed into a different number of
shares as a result of a stock split, stock dividend, recapitalization,
subdivision, reclassification, combination, exchange of shares or similar
transaction, the Merger Consideration shall be proportionately adjusted to
reflect such stock split, stock dividend, recapitalization, subdivision,
reclassification, combination, exchange of shares or similar transaction.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Company.
Except as set forth on the disclosure schedule (with specific reference to
the particular subsection of this Agreement to which the information set
forth in such disclosure schedule relates; provided, however, that to the
extent it is reasonably apparent on the face of such exception that such
exception also relates to another subsection of this Section 3.01, each
such other subsection shall also be qualified by such exception) delivered
by the Company to Parent prior to the execution of this Agreement (the
"Company Disclosure Schedule") and except as disclosed in the Company SEC
Documents filed and publicly available prior to the date of this Agreement
(the "Company Filed SEC Documents"), the Company represents and warrants to
Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company and
each of its subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing (with respect to
jurisdictions that recognize such concept) under the laws of the
jurisdiction in which it is organized and has all requisite corporate or
other power, as the case may be, and authority to carry on its business as
now being conducted. The Company and each of its subsidiaries is duly
qualified or licensed to do business and is in good standing (with respect
to jurisdictions that recognize such concept) in each jurisdiction in which
the nature of its business or the ownership, leasing or operation of its
assets makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or to be in
good standing, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect. The Company has
made available to Parent prior to the execution of this Agreement complete
and correct copies of its articles of incorporation and by-laws, each as
amended to the date of this Agreement.
(b) Subsidiaries. Section 3.01(b) of the Company Disclosure
Schedule sets forth a complete and correct list of each of the Company's
subsidiaries and the jurisdiction of incorporation or organization of each
such subsidiary. All the outstanding shares of capital stock of, or other
equity interests in, each subsidiary of the Company have been validly
issued, are fully paid and nonassessable and are owned directly or
indirectly by the Company, free and clear of all pledges, claims, liens,
charges, encumbrances, mortgages and security interests of any kind or
nature whatsoever (collectively, "Liens") and free of any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
equity interests. Except for the capital stock of its subsidiaries, the
Company does not own, directly or indirectly, any capital stock or other
ownership interest in any person.
(c) Capital Structure. (i) The authorized capital stock of the
Company consists of (A) 100,000,000 shares of Company Common Stock, par
value $1.00 per share, and (B) 20,000,000 shares of preferred stock,
without a set par value, of the Company ("Company Preferred Stock"), of
which 1,000,000 shares have been designated Series X Junior Participating
Preferred Stock, par value $1.00 per share (the "Rights Plan Preferred
Stock"), 97,000 shares have been designated 1987-A Series Convertible
Preferred Stock, par value $1.00 per share, 156,000 shares have been
designated 1988-A Series Convertible Preferred Stock, par value $1.00 per
share, 11,000 shares have been designated 1988-1 Series Convertible
Preferred Stock, par value $1.00 per share, 103,000 shares have been
designated 1989-A Series Convertible Preferred Stock, par value $1.00 per
share, 45,000 shares have been designated 1989-1 Series Convertible
Preferred Stock, par value $1.00 per share, 11,000 shares have been
designated 1989-2 Series Convertible Preferred Stock, par value $1.00 per
share, 138,000 shares have been designated 1990-1 Series Convertible
Preferred Stock, par value $1.00 per share, 11,000 shares have been
designated 1990-2 Series Convertible Preferred Stock, par value $1.00 per
share, 155,000 shares have been designated 1991-1 Series Convertible
Preferred Stock, par value $1.00 per share, 11,000 shares have been
designated 1991-2 Series Convertible Preferred Stock, par value $1.00 per
share, 11,000 shares have been designated 1992-1 Series Convertible
Preferred Stock, par value $1.00 per share, and 1,000 shares have been
designated 1994-1 Series Convertible Preferred Stock, par value $1.00 per
share. At the close of business on July 19, 2002, (A) 14,184,806 shares of
Company Common Stock were issued and outstanding, (B) no shares of Company
Common Stock were held by the Company in its treasury, (C) no shares of
Company Preferred Stock were issued and outstanding, (D) 3,128,736 shares
of Company Common Stock were reserved and available for issuance pursuant
to the Company's 1988 Long-Term Incentive Plan, 1995 Long-Term Incentive
Plan and 1998 Long-Term Incentive Plan (such plans, collectively, the
"Company Stock Plans"), of which 2,450,055 shares were subject to
outstanding options under the Company Stock Plans, (E) 61,593 shares of
Company Common Stock were reserved and available for issuance pursuant to
the Company's 1997 Employee Stock Purchase Plan (the "ESPP") and (F)
1,000,000 shares of Rights Plan Preferred Stock were reserved for issuance
in connection with the rights (the "Rights") issued pursuant to the Rights
Agreement between the Company and KeyCorp Shareholder Services, Inc.
("KeyCorp"), dated as of October 30, 1996, as amended by the First
Amendment to Rights Agreement, effective May 1, 1997, by and among the
Company, KeyCorp and The Bank of New York and the Second Amendment to
Rights Agreement, effective October 1, 2001, by and among the Company, The
Bank of New York and American Stock Transfer & Trust Company (as so
amended, the "Rights Agreement"). The Company has delivered to Parent a
complete and correct list, as of the close of business on July 19, 2002, of
all outstanding stock options or other rights to purchase Company Common
Stock granted under the Company Stock Plans or otherwise (collectively, the
"Company Stock Options"), the number of shares of Company Common Stock
subject to each such Company Stock Option, the grant dates and exercise
prices and vesting schedule of each such Company Stock Option and the names
of the holders thereof. As of the close of business on July 19, 2002, there
were outstanding Company Stock Options to purchase 2,450,055 shares of
Company Common Stock with exercise prices on a per share basis lower than
the Merger Consideration, and the weighted average exercise price of such
Company Stock Options was equal to approximately $22.003 per share of
Company Common Stock. The maximum number of shares of Company Common Stock
that could be purchased with accumulated payroll deductions under the ESPP
as of July 19, 2002 (assuming for such purpose that the fair market value
of a share of Company Common Stock on such date is equal to the Merger
Consideration) is 4,500.
(ii) Except as set forth above, at the close of business on
July 19, 2002, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or
outstanding, and there were no outstanding stock appreciation
rights, rights to receive shares of Company Common Stock on a
deferred basis or other rights that are linked to the value of
Company Common Stock, granted under the Company Stock Plans or
otherwise. Since July 19, 2002, until the date of this Agreement,
(A) there have been no issuances by the Company of shares of
capital stock or other voting securities of the Company other than
issuances of shares of Company Common Stock pursuant to the
exercise of Company Stock Options or the settlement of purchase
rights under the ESPP, in each case outstanding at such date as
required by their terms as in effect on the date of this Agreement
and (B) there have been no issuances by the Company of options,
warrants or other rights to acquire shares of capital stock or
other voting securities from the Company, other than rights that
may have arisen under the ESPP.
(iii) All outstanding shares of capital stock of the Company
are, and all shares which may be issued pursuant to the Company
Stock Plans and the ESPP will be, when issued in accordance with
the terms thereof, duly authorized, validly issued, fully paid and
nonassessable, and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of the Company or
any of its subsidiaries, and no securities or other instruments or
obligations of the Company or any of its subsidiaries the value of
which is in any way based upon or derived from any capital or
voting stock 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. Except as set forth above and except as expressly permitted
under Section 4.01(a), there are no outstanding securities,
options, warrants, calls, rights, contracts, commitments,
agreements, instruments, arrangements, understandings, obligations
or undertakings of any kind to which the Company or any of its
subsidiaries is a party, or by which the Company or any of its
subsidiaries 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, or securities convertible into, or
exchangeable or exercisable for, shares of capital stock or other
voting securities of, the Company or of 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, contract, commitment, agreement, instrument, arrangement,
understanding, obligation or undertaking. There are no outstanding
contractual obligations of the Company or any of its subsidiaries
to (A) repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or (B)
vote or dispose of any shares of the capital stock of any of its
subsidiaries.
(d) Authorization; Noncontravention. The Company has the requisite
corporate power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated by this Agreement, subject, in the
case of the Merger, to obtaining the Company Shareholder Approval, and to
comply with the provisions of this Agreement. The execution and delivery of
this Agreement by the Company, the consummation by the Company of the
transactions contemplated by this Agreement and the compliance by the
Company with the provisions of this Agreement have been duly authorized by
all necessary corporate action on the part 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 contemplated by this
Agreement, subject, in the case of the Merger, to obtaining the Company
Shareholder Approval. This Agreement has been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
by Parent and Sub, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms. The
Board of Directors of the Company, at a meeting duly called and held at
which all directors of the Company were present either in person or by
telephone, duly and unanimously adopted resolutions (i) adopting this
Agreement, (ii) declaring that it is in the best interests of the Company's
shareholders that the Company enter into this Agreement and consummate the
Merger on the terms and subject to the conditions set forth in this
Agreement, (iii) declaring that the consideration to be paid to the
Company's shareholders in the Merger is fair to such shareholders, (iv)
directing that this Agreement be submitted to a vote at a meeting of the
Company's shareholders to be held as promptly as practicable following the
date of this Agreement and (v) recommending that such shareholders approve
this Agreement, which resolutions have not been modified, supplemented or
rescinded and remain in full force and effect. The execution and delivery
by the Company of this Agreement and the consummation of the transactions
contemplated by this Agreement and compliance by the Company with the
provisions of this Agreement do not and will not conflict with, or result
in any violation or breach of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of, or result in,
termination, cancelation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien in or upon
any of the properties or assets of the Company or any of its subsidiaries
under, or give rise to any increased, additional, accelerated or guaranteed
rights or entitlements under, any provision of (i) the articles of
incorporation or by-laws of the Company or comparable organizational
documents of any subsidiary of the Company, (ii) any loan or credit
agreement, bond, debenture, note, mortgage, indenture, lease or other
contract, commitment, agreement, instrument, arrangement, understanding,
obligation, undertaking, permit, concession, franchise or license to which
the Company or any of its subsidiaries is a party or any of their
respective properties or assets is subject or (iii) subject to obtaining or
making the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in the following sentence, any (A)
statute, law, ordinance, rule or regulation or (B) judgment, order or
decree, in each case, applicable to the Company or any of its subsidiaries
or their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, breaches, defaults,
rights, losses, Liens or entitlements that individually or in the aggregate
would not reasonably be expected to (x) have a Material Adverse Effect, (y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially impede,
interfere with, hinder or delay the consummation of the transactions
contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, any domestic
or foreign governmental entity, including any Federal, state or local
government or any court, administrative agency or commission or other
governmental or regulatory authority or agency (each, a "Governmental
Entity") is required by or with respect to the Company or any of its
subsidiaries in connection with the execution and delivery of this
Agreement by the Company, the consummation by the Company of the
transactions contemplated by this Agreement or the compliance by the
Company with the provisions of this Agreement, except for (1) 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 similar filings under any other applicable competition, merger
control, antitrust or similar law, (2) the filing with the Securities and
Exchange Commission (the "SEC") of a proxy statement relating to the
meeting of the shareholders of the Company to be called and convened for
such shareholders to consider the approval of this Agreement (such proxy
statement as amended or supplemented from time to time, the "Proxy
Statement") and such reports under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as may be required in connection with this
Agreement, the Shareholder Agreement and the other transactions
contemplated hereby and thereby, (3) the delivery to the Secretary of State
of the State of Mississippi for filing in accordance with Section
79-4-11.06(b) of the MBCA of the Articles of Merger and the filing of
appropriate documents with the relevant authorities of other states in
which the Company or any of its subsidiaries is qualified to do business,
(4) any filings required under the rules and regulations of the New York
Stock Exchange (the "NYSE"), (5) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required
as a result of the status of Parent or Sub and (6) such other consents,
approvals, orders, authorizations, registrations, declarations and filings,
the failure of which to be obtained or made, individually or in the
aggregate, would not reasonably be expected to (x) have a Material Adverse
Effect, (y) impair in any material respect the ability of the Company to
perform its obligations under this Agreement or (z) prevent or materially
impede, interfere with, hinder or delay the consummation of any of the
transactions contemplated by this Agreement.
(e) SEC Documents; Financial Statements; Undisclosed Liabilities.
The Company has filed all reports, schedules, forms, statements and other
documents (including exhibits and other information incorporated therein)
required to be filed by the Company with the SEC since January 1, 2000 (the
"Company SEC Documents"). As of their respective dates, each of the Company
SEC Documents complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Documents, and none
of the Company SEC Documents at the time it was 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.
The financial statements (including, in each case, any related notes
thereto) of the Company included in the Company SEC Documents, as of their
respective dates of filing, comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, in effect at the time of filing, have been
prepared in accordance with generally accepted accounting principles
("GAAP") (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 in all
material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the most recent financial statements
included in the Company Filed SEC Documents, and except for liabilities
incurred in the ordinary course of business consistent with past practice
or in connection with this Agreement or the transactions contemplated
hereby, neither the Company nor any of its subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) (i) of a nature required to be disclosed on a balance sheet or
in the related notes to financial statements prepared in accordance with
GAAP or (ii) which, individually or in the aggregate, have had or would
reasonably be expected to have a Material Adverse Effect.
(f) Information Supplied. The Proxy Statement will not, at the
date the Proxy Statement is first mailed to the shareholders of the Company
or at the time of the Company Shareholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading,
except that no representation 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 Sub specifically for
inclusion or incorporation by reference therein.
(g) Absence of Certain Changes or Events. Since the date of the
most recent audited financial statements included in the Company Filed SEC
Documents, the Company and its subsidiaries have conducted their respective
businesses only in the ordinary course consistent with past practice, and
there has not been:
(i) any Material Adverse Change;
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or
property) with respect to any shares of capital stock of the
Company or any of its subsidiaries or any repurchase for value by
the Company or any of its subsidiaries of any shares of capital
stock of the Company or any of its subsidiaries, other than (A)
dividends or distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent and (B) regular quarterly
cash dividends with respect to the Company Common Stock in the
amount of $0.10 per share with usual declaration, record and
payment dates;
(iii) any split, combination or reclassification of any
shares of capital stock of the Company or any of its subsidiaries
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 capital stock of the Company or any of its subsidiaries;
(iv) (A) any granting by the Company or any of its
subsidiaries to any current or former director, officer or
employee of the Company or any of its subsidiaries of any increase
in compensation, bonus or other benefits, except for normal
increases in compensation in the ordinary course of business
consistent with past practice or as was required under any
employee benefit plan or employment agreement set forth in Section
3.01(m) or Section 3.01(n)(i) of the Company Disclosure Schedule,
as the case may be, or applicable law, (B) any granting by the
Company or any of its subsidiaries to any current or former
director, officer or employee of the Company or any of its
subsidiaries of any increase in severance or termination pay,
except as was required under any employee benefit plan or
employment, severance or termination agreement set forth in
Section 3.01(m) or Section 3.01(n)(i) of the Company Disclosure
Schedule, as the case may be, or applicable law, (C) any entry by
the Company or any of its subsidiaries into, or any amendment of,
(1) any employment, deferred compensation, consulting, severance,
termination or indemnification agreement, arrangement or
understanding with any current or former director, officer or
employee or (2) any agreement with any current or former director,
officer or employee the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a
transaction involving the Company of a nature contemplated by this
Agreement (all such agreements under this clause (C),
collectively, "Benefit Agreements") or (D) any amendment to, or
modification of, any Company Stock Option or Company Stock-Based
Award;
(v) any change in accounting methods, principles or
practices by the Company or any of its subsidiaries materially
affecting the consolidated assets, liabilities or results of
operations of the Company, except insofar as may have been
required by a change in GAAP, or any material revaluation of any
material assets of the Company or any of its subsidiaries;
(vi) any material election with respect to taxes by the
Company or any of its subsidiaries or settlement or compromise by
the Company or any of its subsidiaries of any material tax
liability; or
(vii) any damage, destruction or loss, whether or not
covered by insurance, that individually or in the aggregate has
had or would reasonably be expected to have a Material Adverse
Effect.
(h) Litigation. There is no suit, action or proceeding pending or,
to the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries that individually or in the aggregate
has had or would reasonably be expected to have a Material Adverse Effect,
nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against, or, to the knowledge
of the Company, investigation by any Governmental Entity involving, the
Company or any of its subsidiaries that individually or in the aggregate
has had or would reasonably be expected to have a Material Adverse Effect.
(i) Taxes. (i) Each of the Company and its subsidiaries has timely
filed all Federal, state and local, domestic and foreign, income and
franchise tax returns and reports and all other tax returns and reports
required to be filed by it and all such returns and reports are complete
and correct, except for such failures to file or to be complete and correct
that individually or in the aggregate has not had and would not reasonably
be expected to have a Material Adverse Effect. Each of the Company and its
subsidiaries has timely paid all taxes due with respect to the taxable
periods covered by such returns and reports and all other material taxes,
except where the failures so to pay individually or in the aggregate has
not had and would not reasonably be expected to have a Material Adverse
Effect, and the most recent financial statements contained in the Company
Filed SEC Documents reflect an adequate reserve for all taxes payable by
the Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements, whether or not any
such taxes are shown as being due on any tax return of the Company or any
of its subsidiaries.
(ii) No Federal, state or local, domestic or foreign, income
or franchise tax return or report or any other material tax return
or report of the Company or any of its subsidiaries is currently
under audit or examination by any taxing authority, and no written
or, to the knowledge of the Company, unwritten notice of such an
audit or examination has been received by the Company or any of
its subsidiaries, except for such audits or examinations that
individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. There is
no deficiency, refund litigation, proposed adjustment or matter in
controversy with respect to any taxes due and owing by the Company
or any of its subsidiaries, other than those that individually or
in the aggregate have not had and would not reasonably be expected
to have a Material Adverse Effect. Each deficiency resulting from
any audit or examination or any concluded litigation relating to
taxes by any taxing authority has been timely paid, except where
the failures so to pay individually or in the aggregate has not
had and would not reasonably be expected to have a Material
Adverse Effect. No issues relating to taxes were raised in writing
by the relevant taxing authority during any presently pending
audit or examination that would reasonably be expected to recur in
a later taxable period, other than those that individually or in
the aggregate have not had and would not reasonably be expected to
have a Material Adverse Effect. All assessments for taxes due and
owing by the Company or any of its subsidiaries with respect to
completed and settled audits or examinations or concluded
litigation have been paid.
(iii) There is no currently effective agreement or other
document extending, or having the effect of extending, the period
of assessment or collection of any material taxes, and no power of
attorney with respect to any taxes has been executed or filed with
any taxing authority.
(iv) No Liens for taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for
statutory Liens for taxes that are not yet due or are being
contested in good faith in appropriate proceedings and any other
Liens that individually or in the aggregate have not had and would
not reasonably be expected to have a Material Adverse Effect.
(v) None of the Company or any of its subsidiaries is a
party to or bound by any tax sharing agreement, tax indemnity
obligation or similar agreement, arrangement or practice with
respect to taxes (including any advance pricing agreement, closing
agreement or other agreement relating to taxes with any taxing
authority).
(vi) The Company and its subsidiaries have complied with all
applicable statutes, laws, ordinances, rules and regulations
relating to the payment and withholding of taxes (including
withholding of taxes pursuant to Sections 1441, 1442, 3121 and
3402 of the Code or similar provisions under any Federal, state or
local, domestic or foreign, laws) and have, within the time and
the manner prescribed by law, withheld from and paid over to the
proper taxing authorities all amounts required to be so withheld
or paid over under applicable laws, except where the failures so
to comply, withhold and pay over individually or in the aggregate
has not had and would not reasonably be expected to have a
Material Adverse Effect.
(vii) Neither the Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code in the two years prior to
the date of this Agreement.
(viii) To the knowledge of the Company, neither the Company
nor any of its subsidiaries (A) has been a member of an affiliated
group filing a consolidated, combined or unitary tax return (other
than a group the common parent of which was the Company) in any
open tax year or (B) has any liability for taxes of any person
(other than the Company or any of its subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any other similar provision of
state, local or foreign law), as a transferee or successor, by
contract or otherwise.
(ix) Neither the Company nor any of its subsidiaries is or
has been a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(ii) of the Code.
(x) Neither the Company nor any of its subsidiaries has been
the subject of an IRS tax ruling that has had or would reasonably
be expected to have a Material Adverse Effect with respect to any
open tax year.
(xi) Neither the Company nor any of its subsidiaries has
agreed to include, or, to the knowledge of the Company, is
required to include, in income any material adjustment under
Section 481(a) of the Code (or an analogous provision of state,
local or foreign law) by reason of a change in accounting method
or otherwise that has had or would reasonably be expected to have
a Material Adverse Effect.
(xii) As used in this Agreement, "tax" or "taxes" shall
include all Federal, state and local, domestic and foreign,
income, franchise, property, sales, excise, employment, payroll,
social security, value-added, ad valorem, transfer, withholding
and other taxes, including taxes based on or measured by gross
receipts, profits, sales, use or occupation, tariffs, levies,
impositions, assessments or governmental charges of any nature
whatsoever, including any interest penalties or additions with
respect thereto, and any obligations under any agreements or
arrangements with any other person with respect to such amounts.
(j) Contracts. (i) Section 3.01(j) of the Company Disclosure
Schedule sets forth each contract, commitment, agreement, lease,
instrument, arrangement, understanding, obligation or undertaking to which
the Company or any of its subsidiaries is a party or by or to which any of
their properties are bound or subject that is material to the business of
the Company and its subsidiaries, taken as a whole, including any such
contract, commitment, agreement, lease, instrument, arrangement,
understanding, obligation or undertaking:
(A) pursuant to which the Company or any of its
subsidiaries has agreed not to compete with any person, or
to actively engage, in any line of business;
(B) pursuant to which the Company or any of its
subsidiaries has entered into an exclusive distributorship
arrangement;
(C) with (1) any beneficial owner of more than one
percent of the outstanding Company Common Stock or more than
one percent of the capital stock of any of the Company's
subsidiaries, (2) any affiliate of the Company or any of its
subsidiaries or (3) any current or former director, officer,
employee or consultant of the Company or any of its
subsidiaries or of any affiliate of the Company or any of
its subsidiaries (other than pursuant to Benefit Agreements
or Benefit Plans);
(D) that grants exclusive license rights to material
Intellectual Property of the Company;
(E) under which the Company or any of its
subsidiaries has (1) incurred any indebtedness for borrowed
money that is currently owing or (2) given any guarantee in
respect of indebtedness for repayment of borrowed money, in
each case having an aggregate principal amount in excess of
$100,000;
(F) that contains any guarantees as to the Company's
or any of its subsidiaries future revenues or operating
income;
(G) that is otherwise material and that requires any
consent (including any consent to assignment) of or notice
to a third party, or any approval, authorization,
qualification or order of any Governmental Entity, in
connection with this Agreement or the consummation of the
transactions contemplated hereby in order to avoid
termination of or loss of benefits thereunder;
(H) providing for payments of royalties to third
parties at a current rate in excess of $100,000 per year;
(I) not made in the ordinary course of business
granting a third party any license to any material
Intellectual Property rights of the Company or any of its
subsidiaries, other than "shrink-wrap" licenses or licenses
granted in connection with the sale of products;
(J) providing confidential treatment by the Company
or any of its subsidiaries of third party information, other
than (1) nondisclosure agreements entered into by the
Company or any of its subsidiaries in the ordinary course of
business or (2) the Confidentiality Agreement;
(K) granting the other party thereto or a third party
"most favored nation" status that, following consummation of
the Merger, would in any way apply to Parent or any of its
subsidiaries (other than the Company and its subsidiaries
and their products);
(L) pursuant to which the Company or any of its
subsidiaries receives or has a continuing obligation to
purchase any information technology services or information
technology products that are material to the conduct of the
business of the Company and its subsidiaries, taken as a
whole.
(ii) Each contract of the Company and its subsidiaries
required to be listed in Section 3.01(j) of the Company Disclosure
Schedule is in full force and effect and is a legal, valid and
binding agreement of the Company or such subsidiary and, to the
knowledge of the Company, of each other party thereto, enforceable
against the Company or such subsidiary, as the case may be, and,
to the knowledge of the Company, against the other party or
parties thereto, in each case, in accordance with its terms,
except for such failures to be in full force and effect or
enforceable that individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its subsidiaries has performed or
is performing in all material respects all material obligations
required to be performed by it under such contracts and is not
(with or without notice or lapse of time or both) in breach or
default in any material respect thereunder, and, to the knowledge
of the Company, no other party to any of such contracts is (with
or without notice or lapse of time or both) in breach or default
in any material respect thereunder except, in each case, for such
instances of nonperformance and such breaches that individually or
in the aggregate have not had and would not reasonably be expected
to have a Material Adverse Effect.
(k) Compliance with Laws. The Company and its subsidiaries are,
and since December 31, 2000 have been, in compliance with all statutes,
laws, ordinances, rules, regulations, judgments, orders and decrees of any
Governmental Entity applicable to their businesses or operations, except
for instances of noncompliance that individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse
Effect, impair in any material respect the ability of the Company to
perform its obligations under this Agreement or prevent or materially
impede, interfere with, hinder or delay the consummation of any of the
transactions contemplated by this Agreement. None of the Company or any of
its subsidiaries has received, since December 31, 2000, a written notice or
other written communication alleging a violation of any statute, law,
ordinance, rule, regulation, judgment, order or decree of any Governmental
Entity applicable to its businesses or operations, except for such
violations that individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. The Company and
its subsidiaries have in effect all Federal, state and local, domestic and
foreign, governmental consents, approvals, orders, authorizations,
certificates, filings, notices, permits, concessions, franchises, licenses
and rights (collectively "Permits") necessary for them to own, lease or
operate their properties and assets and to carry on their businesses as now
conducted and there has occurred no violation of, or default under, any
such Permit, except for the lack of Permits and for violations of, or
defaults under, Permits, which lack of Permits, violations or defaults
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. The consummation of the Merger,
in and of itself, would not reasonably be expected to cause the revocation
or cancelation of any such Permit, which revocation or cancelation would
reasonably be expected to have a Material Adverse Effect.
(l) Environmental Matters. Except as has not had and would not
reasonably be expected to have a Material Adverse Effect, (i) to the
knowledge of the Company, each of the Company and its subsidiaries are, and
within the period of all applicable statutes of limitations has been, in
compliance with all applicable Environmental Laws, including with respect
to the use and disposal of Hazardous Materials; (ii) each of the Company
and its subsidiaries has received all air, water and waste Permits required
under any Environmental Law for the emission and/or disposal of solid,
liquid and gaseous materials from its operations at all its sites,
including any Permits for construction under the Clean Air Act, and is
operating in compliance with such Permits; (iii) to the knowledge of the
Company, no property currently or formerly owned or operated by the Company
or any of its subsidiaries (including soils, groundwater, surface water,
buildings or other structures) has been contaminated with any Hazardous
Materials which would subject the Company to any liability under
Environmental Laws or require any expenditure for remediation to meet
applicable standards thereunder; (iv) to the knowledge of the Company,
neither the Company nor any of its subsidiaries is subject to any liability
for Hazardous Materials disposal or contamination on any third party
property; (v) neither the Company nor any of its subsidiaries has received,
since December 31, 1997, any written notice, demand, letter, claim or
request for information from any Governmental Entity indicating that it is
or may be in violation of or subject to liability under any Environmental
Law, other than written notices, demands, letters, claims, or requests for
information that relate to matters that have been resolved with the
appropriate Governmental Entity with no further anticipated liability to
the Company or its subsidiaries; (vi) neither the Company nor any of its
subsidiaries is subject to any order, decree, injunction or other
arrangement with any Governmental Entity or any indemnity or other
agreement with any person, in each case relating to liability under any
Environmental Law; (vii) Section 3.01(l) of the Company Disclosure Schedule
sets forth a complete and correct list of each property of the Company or
any of its subsidiaries that contains any underground storage tanks; and
(viii) there are no other circumstances or conditions involving the Company
or any of its subsidiaries that would reasonably be expected to result in
any claims, liability, investigations, costs or restrictions on the
ownership, use, or transfer of any property of the Company or any of its
subsidiaries in connection with any Environmental Law. The representations
and warranties set forth in this Section 3.01(1) are the Company's sole and
exclusive representations in this Agreement relating to environmental
matters. The term "Environmental Laws" means all statutes, laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
Permits or binding agreements issued, promulgated or entered into by any
Governmental Entity, relating in any way to the environment, preservation
or reclamation of natural resources, the presence, management, Release or
threat of Release of, or exposure to, Hazardous Materials, or to human
health and safety. The term "Hazardous Materials" means (A) petroleum
products and by-products, asbestos and asbestos-containing materials, urea
formaldehyde foam insulation, medical or infectious wastes, polychlorinated
biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting
substances or (B) any chemical, material, substance, waste, pollutant or
contaminant that is prohibited, limited or regulated by or pursuant to any
Environmental Law. The term "Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing or migrating into or through the environment.
(m) Absence of Changes in Benefit Plans; Labor Relations. Except
as required to comply with applicable law, since the date of the most
recent audited financial statements included in the Company Filed SEC
Documents, 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 employment, bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock
purchase, stock appreciation, restricted stock, stock option, phantom
stock, performance, retirement, thrift, savings, stock bonus, paid time
off, perquisite, fringe benefit, vacation, severance, disability, death
benefit, hospitalization, medical, welfare benefit or other plan, program,
policy, arrangement or understanding (whether or not legally binding)
maintained, contributed to or required to be maintained or contributed to
by the Company or any of its subsidiaries or any other person or entity
that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each, a "Commonly Controlled
Entity"), in each case providing benefits to any current or former
director, officer, employee or consultant of the Company or any of its
subsidiaries (collectively, the "Benefit Plans"), or any material change in
any actuarial or other assumption used to calculate funding obligations
with respect to any Pension Plans, or any change in the manner in which
contributions to any Pension Plans are made or the basis on which such
contributions are determined. Section 3.01(m) of the Company Disclosure
Schedule contains a complete and correct list of (i) each currently binding
Benefit Agreement and (ii) each collective bargaining agreement or other
labor union contract to which the Company or any of its subsidiaries are a
party as of the date of this Agreement. There is no labor dispute, strike
or work stoppage against the Company or any of its subsidiaries pending or,
to the knowledge of the Company, threatened which would interfere with the
respective business activities of the Company or its subsidiaries, except
where such dispute, strike or work stoppage has not had and would not
reasonably be expected to have a Material Adverse Effect. None of the
Company, any of its subsidiaries or, to the knowledge of the Company, any
of their respective representatives or employees has committed an unfair
labor practice in connection with the operation of the respective
businesses of the Company or any of its subsidiaries, there is no charge or
complaint against the Company or any of its subsidiaries by the National
Labor Relations Board or any comparable Governmental Entity pending or
threatened in writing and there are no other pending, or, to the knowledge
of the Company, threatened lawsuits, grievances or claims involving the
Company or any of its subsidiaries related to labor or employment matters,
in each case other than any such matter that has not had and would not
reasonably be expected to have a Material Adverse Effect.
(n) ERISA Compliance. (i) Section 3.01(n)(i) of the Company
Disclosure Schedule contains a complete and correct list of each Benefit
Plan that is an "employee pension benefit plan" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (a "Pension Plan"), each Benefit Plan that provides severance
benefits, vacation, paid time off or bonus leave, each Benefit Plan that
provides for the purchase or issuance of shares of capital stock, warrants,
options, stock appreciation rights or other rights in respect of any shares
of capital stock of any entity or any securities convertible or
exchangeable into such shares, each "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA) that provides for medical, dental, life
and disability insurance benefits, and each other material Benefit Plan.
The Company has made available to Parent complete and correct copies of (A)
each Benefit Plan required to be listed on Section 3.10(n)(i) of the
Company Disclosure Schedule (or, in the case of any such Benefit Plan that
is unwritten, descriptions thereof), (B) the two most recent annual reports
on Form 5500 required to be filed with the Internal Revenue Service (the
"IRS") with respect to each Benefit Plan (if any such report was required),
(C) the most recent summary plan description for each Benefit Plan for
which such summary plan description is required and (D) each trust
agreement and insurance or group annuity contract relating to any Benefit
Plan. Each Benefit Plan maintained, contributed to or required to be
contributed to by the Company or any of its subsidiaries has been
administered in all material respects in accordance with its terms. The
Benefit Plans have been established and administered in compliance in all
material respects with the applicable provisions of ERISA, the Code and all
other applicable laws, including laws of foreign jurisdictions.
(ii) All Pension Plans maintained, contributed to or
required to be contributed to by the Company or any of its
subsidiaries intended to be tax-qualified have been the subject of
determination letters from the IRS to the effect that such Pension
Plans are qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, no such
determination letter has been revoked (or, to the knowledge of the
Company, has revocation been threatened) and, to the knowledge of
the Company, (A) no event has occurred since the date of the most
recent determination letter or application therefor relating to
any such Pension Plan that would adversely affect the
qualification of such Pension Plan and (B) no event has occurred
since the date of the most recent audited financial statements
included in the Company Filed SEC Documents that would reasonably
be expected to materially increase the costs relating to such
Pension Plan or require security under Section 307 of ERISA. All
Pension Plans maintained, contributed to or required to be
contributed to by the Company or any of its subsidiaries required
to have been approved by any foreign Governmental Entity have been
so approved, no such approval has been revoked (or, to the
knowledge of the Company, has revocation been threatened) and, to
the knowledge of the Company, (A) no event has occurred since the
date of the most recent approval or application therefor relating
to any such Pension Plan that would materially affect any such
approval relating thereto and (B) no event has occurred since the
date of the most recent audited financial statements included in
the Company Filed SEC Documents that would reasonably be expected
to materially increase the costs relating to any such Pension
Plan. The Company has made available to Parent a complete and
correct copy of the most recent determination letter received with
respect to each Pension Plan maintained, contributed to or
required to be contributed to by the Company or any of its
subsidiaries, as well as a complete and correct copy of each
pending application for a determination letter, if any. The
Company has also made available to Parent a complete and correct
list of all amendments to any Pension Plan maintained, contributed
to or required to be contributed to by the Company or any of its
subsidiaries as to which a favorable determination letter has not
yet been received.
(iii) Neither the Company nor any Commonly Controlled Entity
(A) maintains, contributes to or is required to contribute to any
Benefit Plan that is subject to Title IV of ERISA or (B) has any
unsatisfied liability under Title IV of ERISA.
(iv) All material reports, returns and similar documents
with respect to all Benefit Plans required to be filed with any
Governmental Entity or distributed to any Benefit Plan participant
have been duly and timely filed or distributed. The Company has
received no notice of, and to the knowledge of the Company, there
are no investigations by any Governmental Entity with respect to,
termination proceedings or other claims (except claims for
benefits payable in the normal operation of the Benefit Plans),
suits or proceedings against or involving any Benefit Plan or
asserting any rights or claims to benefits under any Benefit Plan
that could give rise to any material liability, and, to the
knowledge of the Company, there are not any facts that could give
rise to any material liability in the event of any such
investigation, claim, suit or proceeding.
(v) All contributions, premiums and benefit payments under
or in connection with the Benefit Plans that are required to have
been made as of the date hereof in accordance with the terms of
the Benefit Plans have been timely made or have been reflected on
the most recent consolidated balance sheet filed or incorporated
by reference into the Company Filed SEC Documents. No Pension Plan
has an "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code), whether or
not waived.
(vi) With respect to each Benefit Plan, (A) there has not
occurred any prohibited transaction in which the Company or any of
its subsidiaries or any of their respective employees has engaged
that could subject the Company or any of its subsidiaries or any
of their respective employees, or, to the knowledge of the
Company, a trustee, administrator or other fiduciary of any trust
created under any Benefit Plan, to the tax or penalty on
prohibited transactions imposed by Section 4975 of ERISA or the
sanctions imposed under Title I of ERISA and (B) neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, any trustee, administrator or other fiduciary of any
Benefit Plan nor any agent of any of the foregoing, has engaged in
any transaction or acted in a manner that could, or failed to act
so as to, subject the Company or any of its subsidiaries or, to
the knowledge of the Company, any trustee, administrator or other
fiduciary, to any liability for breach of fiduciary duty under
ERISA or any other applicable law. No Pension Plan or related
trust has been terminated, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) for
which the 30-day reporting requirement has not been waived with
respect to any Benefit Plan during the last five years, and no
advance notice of a reportable event will be required to be filed
in connection with the transactions contemplated by this
Agreement.
(vii) Each Benefit Plan that is an employee welfare benefit
plan and which is required to be listed in Section 3.01(n)(i) of
the Company Disclosure Schedule may be amended or terminated
(including with respect to benefits provided to retirees and other
former employees) without material liability to the Company or any
of its subsidiaries at any time after the Effective Time (subject
to any applicable notice periods). Each of the Company and its
subsidiaries complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code or any similar state
statute with respect to each Benefit Plan that is a group health
plan, as such term is defined in Section 5000(b)(1) of the Code or
such state statute. Neither the Company nor any of its
subsidiaries has any material obligations for retiree health or
life insurance benefits under any Benefit Plan that is required to
be listed in Section 3.01(n)(i) of the Company Disclosure
Schedule.
(viii) None of the execution and delivery of this Agreement,
the obtaining of the Company Shareholder Approval or the
consummation of the Merger or any other transaction contemplated
by this Agreement (including as a result of any termination of
employment during a fixed period following the Effective Time)
will (A) entitle any current or former director, officer, employee
or consultant of the Company or any of its subsidiaries to
severance or termination pay, (B) accelerate the time of payment
or vesting or trigger any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under, increase
the amount payable or trigger any other material obligation
pursuant to, any Benefit Plan or (C) result in any breach or
violation of, or a default under, any Benefit Plan.
(ix) Neither the Company nor any of its subsidiaries has any
material liability or obligations under or on account of a Benefit
Plan and arising out of the hiring of persons to provide services
to the Company or any of its subsidiaries and treating such
persons as consultants or independent contractors and not as
employees of the Company or any of its subsidiaries.
(o) No Excess Parachute Payments. Other than payments or benefits
that may be made pursuant to the agreements and plans listed in Section
3.01(o) of the Company Disclosure Schedule, no amount or other entitlement
or economic benefit that could be received (whether in cash or property or
the vesting of property) by or for the benefit of any director, officer,
employee or consultant of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any Benefit Plan, Benefit Agreement or
otherwise would be characterized as an "excess parachute payment" (as such
term is defined in Section 280G(b)(1) of the Code). Section 3.01(o) of the
Company Disclosure sets forth a complete and correct list of the name and
title of each person entitled to receive any additional payment from the
Company or any of its subsidiaries, the Surviving Corporation or any other
person in the event that the excise tax required by Section 4999(a) of the
Code is imposed on such person.
(p) Vote Required. The affirmative vote of holders of a majority
of the shares represented in person or by proxy at a meeting at which a
quorum consisting of at least a majority of the outstanding shares of
Company Common Stock to approve this Agreement (the "Company Shareholder
Approval") is the only vote of the holders of any class or series of
capital stock of the Company necessary to approve this Agreement and the
transactions contemplated hereby.
(q) State Takeover Statutes. The Board of Directors of the Company
has unanimously approved the terms of this Agreement and the consummation
of the Merger and the other transactions contemplated by this Agreement,
and such approval represents all action necessary to render inapplicable to
this Agreement, the Merger and the other transactions contemplated by this
Agreement, the provisions of the Mississippi Shareholder Protection Act and
paragraph (A) of Article V of the Company's articles of incorporation to
the extent, if any, the Mississippi Shareholder Protection Act or such
paragraph (A) would otherwise be applicable to this Agreement, the Merger
and the other transactions contemplated by this Agreement. The Mississippi
Control Share Act is not applicable to this Agreement, the Merger and the
other transactions contemplated by this Agreement pursuant to Article X of
the Company's articles of incorporation. No other fair price, moratorium,
control share acquisition or other form of antitakeover statute, rule or
regulation of the State of Mississippi applies or purports to apply to this
Agreement, the Merger or the other transactions contemplated by this
Agreement.
(r) Rights Agreement. The Company and the Board of Directors of
the Company have taken all action necessary to cause the Rights Agreement
to be amended to (i) render the Rights inapplicable to this Agreement, the
Shareholder Agreement, the Merger and the other transactions contemplated
by this Agreement and the Shareholder Agreement and (ii) ensure that (A)
none of Parent, Sub or any of their respective affiliates or associates is
or will become an "Acquiring Person" or "Adverse Person" (each, as defined
in the Rights Agreement) by reason of this Agreement, the Shareholder
Agreement, the Merger or any other transaction contemplated by this
Agreement and the Shareholder Agreement and (B) a "Distribution Date" (as
defined in the Rights Agreement) shall not occur by reason of this
Agreement, the Shareholder Agreement, the Merger or any other transaction
contemplated by this Agreement and the Shareholder Agreement.
(s) Brokers. No broker, investment banker, financial advisor or
other person, other than Credit Suisse First Boston Corporation, the fees
and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of the Company. The Company has
delivered to Parent complete and correct copies of all agreements under
which any such fees or expenses are payable and all indemnification and
other agreements related to the engagement of the persons to whom such fees
are payable.
(t) Opinion of Financial Advisor. The Board of Directors of the
Company has received the opinion of Credit Suisse First Boston Corporation,
dated the date of this Agreement, to the effect that, as of such date, the
Merger Consideration is fair, from a financial point of view, to holders of
Company Common Stock, and a signed copy of such opinion has been, or will
promptly be, delivered to Parent solely for informational purposes.
(u) Title to Properties. (i) The Company and each of its
subsidiaries has good and valid title to, or valid leasehold interests in,
all of its material properties and assets except for such as are no longer
used or useful in the conduct of its business or as have been disposed of
in the ordinary course of business and except for defects in title,
easements, restrictive covenants and similar encumbrances that individually
or in the aggregate have not materially interfered with, and would not
reasonably be expected to materially interfere with, its ability to conduct
its business as presently conducted. All such material assets and
properties, other than assets and properties in which the Company or any of
its subsidiaries has a leasehold interest, are free and clear of all Liens,
except for Liens that individually or in the aggregate have not materially
interfered with, and would not reasonably be expected to materially
interfere with, the ability of the Company or any of its subsidiaries to
conduct its business as presently conducted.
(ii) Each of the Company and 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, except for such
instances of noncompliance or failures to be in full force and
effect that individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its subsidiaries enjoys peaceful
and undisturbed possession under all such material leases, except
for failures to do so that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material
Adverse Effect.
(v) Intellectual Property. (i) Section 3.01(v) of the Company
Disclosure Schedule lists all patents, patent applications, registrations
of or applications for trademarks, trade names, service marks and
registered copyrights and applications therefor, if any, owned by or
licensed to the Company or any of its subsidiaries, and all material
license agreements relating to any Intellectual Property (other than
"shrink-wrap" licenses or licenses granted in connection with the sale of
products) to which the Company or any of its subsidiaries is a party, in
each case as of the date of this Agreement.
(ii) Except as has not had and would not reasonably be
expected to have a Material Adverse Effect:
(A) the Company and each of its subsidiaries owns, or
is licensed or otherwise has the right to use (in each
case, free and clear of any Liens), all Intellectual
Property used in carrying on its business as presently
being conducted;
(B) to the knowledge of the Company, neither the
Company nor any of its subsidiaries is, in the conduct of
its business as presently being conducted, infringing on
any valid and/or enforceable patent or patent application
or otherwise violating any other valid and/or enforceable
Intellectual Property owned or controlled by any other
person;
(C) the Company and each of its subsidiaries is in
substantial compliance with the terms of all material
licenses, agreements and contracts pursuant to which the
Company or such subsidiary has the right to use any
Intellectual Property owned by any other person, and the
consummation of the Merger will not impair or adversely
affect the rights of the Company to use any such
Intellectual Property;
(D) there is no suit, claim, action, investigation or
proceeding pending or, to the knowledge of the Company,
threatened orally or in writing by any other person
naming or accusing the Company or any of its subsidiaries
of possible infringement of any patent or patent
application or of otherwise violating any Intellectual
Property owned or controlled by any other person;
(E) to the knowledge of the Company, no person is
infringing on or otherwise violating any right of the
Company or any of its subsidiaries with respect to any
Intellectual Property owned by, licensed to or otherwise
used by the Company or any of its subsidiaries;
(F) to the knowledge of the Company, none of the
former or current research scientists, technicians or
other personnel of the Company or any of its
subsidiaries, including all former and current employees,
agents, consultants and contractors who have contributed
to or participated in the conception and development of
the material Intellectual Property of the Company or any
of its subsidiaries, have asserted in writing or, to the
Company's knowledge, threatened to assert a valid claim
against the Company or any of its subsidiaries in
connection with the involvement of such persons in the
conception and development of any such Intellectual
Property;
(G) the Company and each of its subsidiaries has
taken commercially reasonable steps to protect their
material Intellectual Property and their rights
thereunder, and to the knowledge of the Company no
material rights to such Intellectual Property have been
lost, diluted or otherwise materially impaired or are in
jeopardy of being lost, diluted or otherwise materially
impaired through failure to act by the Company or any of
its subsidiaries.
(iii) As used in this Agreement, "Intellectual Property"
means trademarks (registered or unregistered), service marks,
brand names, certification marks, trade dress, assumed names,
trade names, domain names and other indications of origin, the
goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to register,
the foregoing, including any extension, modification or renewal of
any such registration or application; inventions, discoveries and
ideas, whether patented, patentable or not in any jurisdiction;
chemical formulas and manufacturing processes; computer programs
and software (including source code, object code and data),
know-how and any other technology; trade secrets and confidential
information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works,
whether copyrighted, copyrightable or not in any jurisdiction;
registration or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; any similar
intellectual property or proprietary rights similar to any of the
foregoing; and licenses, immunities, covenants not to xxx and the
like relating to any of the foregoing.
SECTION 3.02. Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization and Authority. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite corporate
power and authority to conduct its business as presently conducted. Parent
has made available to the Company prior to the execution of this agreement
complete and correct copies of the articles of incorporation and by-laws of
Sub, as amended to the date of this Agreement.
(b) Authorization; Noncontravention. Parent and Sub have the
requisite corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated by this Agreement
and to comply with the provisions of this Agreement. The execution and
delivery of this Agreement by Parent and Sub, the consummation by Parent
and Sub of the transactions contemplated by this Agreement and the
compliance by Parent and Sub with the provisions of this Agreement have
been duly authorized by all necessary corporate action on the part of
Parent and Sub (including approval of this Agreement by the sole
shareholder of Sub) and no other corporate proceedings on the part of
Parent or Sub are necessary to authorize this Agreement or to consummate
the transactions contemplated by this Agreement. This Agreement has been
duly executed and delivered by Parent and Sub, as applicable, and, assuming
the due authorization, execution and delivery by the Company, constitutes a
valid and binding obligation of Parent and Sub, as applicable, enforceable
against Parent and Sub, as applicable, in accordance with its terms. The
execution and delivery by Parent and Sub of this Agreement and the
consummation of the transactions contemplated by this Agreement and
compliance by Parent and Sub with the provisions of this Agreement do not
and will not conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of, or result in, termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or result in the
creation of any Lien in or upon any of the properties or assets of Parent
or Sub under, or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under, any provision of (i) the
certificate of incorporation or by-laws of Parent or the articles of
incorporation or by-laws of Sub, (ii) any loan or credit agreement, bond,
debenture, note, mortgage, indenture, lease or other contract, commitment,
agreement, instrument, arrangement, understanding, obligation, undertaking,
permit, concession, franchise or license to which Parent or Sub is a party
or any of their respective properties or assets is subject or (iii) subject
to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in the following
sentence, any (A) statute, law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case, applicable to Parent or Sub or any
of their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, breaches, defaults,
rights, losses, Liens or entitlements that individually or in the aggregate
would not reasonably be expected to impair in any material respect the
ability of each of Parent and Sub to perform its obligations under this
Agreement or prevent or materially impede, interfere with, hinder or delay
the consummation of any of the transactions contemplated by this Agreement.
No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Parent or Sub in connection with the execution and delivery of
this Agreement by Parent and Sub, the consummation by Parent and Sub of the
transactions contemplated by this Agreement or the compliance by Parent or
Sub with the provisions of this Agreement, except for (1) the filing of a
premerger notification and report form under the HSR Act or similar filings
under any other applicable competition, merger control, antitrust or
similar law, (2) the filing with the SEC of such reports under the Exchange
Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (3) the delivery to the Secretary of
State of the State of Mississippi for filing in accordance with Section
79-4-11.06(b) of the MBCA of the Articles of Merger and the filing of
appropriate documents with the relevant authorities of other states in
which the Company or any of its subsidiaries is qualified to do business
and (4) such other consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained
or made individually or in the aggregate would not reasonably be expected
to impair in any material respect the ability of each of Parent and Sub to
perform its obligations under this Agreement or prevent or materially
impede, interfere with, hinder or delay the consummation of any of the
transactions contemplated by this Agreement.
(c) Information Supplied. None of the information supplied or to
be supplied by or on behalf of Parent or Sub for inclusion or incorporation
by reference in the Proxy Statement will, at the date the Proxy Statement
is first mailed to shareholders of the Company or at the time of the
Company Shareholders Meeting, 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.
(d) Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, and
has engaged in no business other than in connection with the transactions
contemplated by this Agreement.
(e) Financing. Parent has sufficient funds available to pay the
aggregate amount of Merger Consideration and to pay all fees and expenses
related to the transactions contemplated by this Agreement.
(f) Ownership of Company Common Stock. Neither Parent nor Sub nor
any affiliate or associate (as such terms are defined under the Mississippi
Shareholder Protection Act) thereof beneficially owns, directly or
indirectly, any shares of Company Common Stock or is a party to any
agreement, arrangement or understanding (other than this Agreement and the
Shareholder Agreement) for the purpose of acquiring, holding, voting or
disposing of any shares of Company Common Stock.
(g) Brokers. No broker, investment banker, financial advisor or
other person, other xxxx Xxxxxxx Xxxxx & Co., Inc., the fees and expenses
of which will be paid by Parent, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time, except as contemplated by this Agreement or as consented to in
advance in writing by Parent, the Company shall, and shall cause each of
its subsidiaries to, carry on its business in the ordinary course
consistent with past practice and in compliance in all material respects
with all applicable laws and regulations and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its current
business organizations, keep available the services of its current
officers, employees and consultants and preserve its relationships with
customers, suppliers, licensors, licensees, distributors, contract
manufacturers and others having business dealings with it with the
intention that its goodwill and ongoing business shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Effective Time, except as
contemplated by this Agreement or expressly set forth in Section 4.01(a) of
the Company Disclosure Schedule, the Company shall not, and shall not
permit any of its subsidiaries to, without Parent's prior written consent:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in
respect of, any of its capital stock, other than (1) dividends or
distributions by a direct or indirect wholly owned subsidiary of
the Company to its parent and (2) regular quarterly cash dividends
with respect to the Company Common Stock, not in excess of $0.10
per share, with usual declaration, record and payment dates and in
accordance with the Company's past dividend policy, (y) split,
combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (z)
purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its subsidiaries or any other securities
thereof or any rights, warrants or options to acquire any such
shares or other securities;
(ii) issue, deliver, sell, grant, pledge or otherwise
encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or exchangeable
for, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, or any
"phantom" stock, "phantom" stock rights, stock appreciation rights
or stock-based performance units, other than (1) the issuance of
shares of Company Common Stock (and associated Rights) upon the
exercise of Company Stock Options or Company Stock-Based Awards or
the settlement of purchase rights under the ESPP, in each case
outstanding on the date of this Agreement and in accordance with
their present terms and (2) the granting of rights that may arise
under the ESPP, as the ESPP is in effect on the date of this
Agreement;
(iii) (x) amend its articles of incorporation or by-laws or
comparable charter or organizational documents or alter through
merger, liquidation, reorganization, restructuring or in any other
manner the corporate structure or ownership of any subsidiary of
the Company that does not constitute an inactive subsidiary as of
the date of this Agreement, or (y) adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation,
recapitalization or other reorganization of the Company or any of
its subsidiaries that does not constitute an inactive subsidiary
as of the date of this Agreement, other than the Merger;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by purchasing all of or a substantial equity
interest in, or by any other manner, any business or any
corporation, partnership, limited liability company, joint
venture, association or other business organization or division
thereof or (y) except as permitted by Section 4.01(a)(vii), any
assets other than inventory, supplies, raw materials or other
immaterial assets, in each case in the ordinary course of business
consistent with past practice;
(v) sell, lease, license, mortgage, sell and leaseback or
otherwise encumber or subject to any Lien or otherwise dispose of
any of its properties or assets or any interests therein
(including securitizations), except sales of inventory in the
ordinary course of business consistent with past practice;
(vi) (x) other than (A) Yen-denominated short-term
borrowings incurred in the ordinary course of business consistent
with past practice not to exceed JPY2,500,000,000 at any time
outstanding and (B) borrowings to satisfy letter of credit
obligations not to exceed $1,000,000 at any time outstanding,
incur or suffer to exist any indebtedness for borrowed money or
guarantee any such indebtedness of another person, 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 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 (y) 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;
(vii) make any new capital expenditure or capital
expenditures, or incur any obligations or liabilities in
connection therewith, (A) that are not included in the Company's
capital expenditure budget provided to Parent prior to the date of
this Agreement or (B) that are included in such capital
expenditure budget but that are in excess of $1,000,000 on an
individual basis;
(viii) except as required by law, (w) pay, discharge, settle
or satisfy any claims, liabilities, obligations or litigation
(whether absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business consistent with past practice or
in accordance with their terms as in effect on the date of this
Agreement, of liabilities reflected or reserved against in the
most recent audited financial statements (or the notes thereto) of
the Company included in the Company Filed SEC Documents (for
amounts not in excess of such reserves) or incurred since the date
of such financial statements in the ordinary course of business
consistent with past practice, (x) cancel any material
indebtedness, (y) waive, release, grant or transfer any claims or
rights of substantial value or (z) waive any benefit of, or agree
to modify in any respect, or fail to enforce, the confidentiality
provisions relating to the Company's information in any agreement
to which the Company or any of its subsidiaries is a party;
(ix) except in the ordinary course of business consistent
with past practice, modify, amend or terminate any material
contract or agreement to which the Company or any of its
subsidiaries is a party or waive, release or assign any material
rights or claims thereunder;
(x) enter into any contract, agreement, binding arrangement
or understanding (w) relating to research and development, or to
the distribution of, or the supply of raw materials for, or the
manufacturing by third parties of, products of the Company, other
than any such contracts, agreements, arrangements or
understandings that (A) individually, has aggregate future payment
or other obligations of no greater than $250,000 and, in the
aggregate, have future payment or other obligations of no greater
than $1,000,000 or (B) relate to the supply of raw materials, are
entered into in the ordinary course of business consistent with
past practice and in each case have a term of no greater than
three months, (x) that limits in any material respect the ability
of the Company or any of its subsidiaries to engage in any
business activities or operations or that, following consummation
of the Merger, would restrict in any way the ability of Parent or
any of its subsidiaries (other than the Company and its
subsidiaries) to engage in any business activities or operations,
(y) that is of a nature that would be required to be filed as an
exhibit to Form 10-K under the Exchange Act or (z) if consummation
of the transactions contemplated hereby or compliance by the
Company with the provisions of this Agreement will violate or
conflict with, or result in any violation or breach of, or default
(with or without notice or lapse of time, or both) under, or give
rise to a right of, or result in, termination, cancelation or
acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien in or upon any of the
properties or assets of the Company or Parent or any of their
respective subsidiaries under, any provision of such contract,
agreement, binding arrangement or understanding;
(xi) except as otherwise contemplated by this Agreement or
as required in accordance with the terms of any agreement or plan
as in effect on the date hereof or to comply with applicable law,
(A) adopt, enter into, terminate or amend in any material respect
(I) any collective bargaining agreement or other labor union
contract or Benefit Plan or (II) any other agreement, plan or
policy involving the Company and one or more of its current or
former directors, officers, employees or consultants, (B) increase
in any manner the compensation, bonus or fringe or other benefits
of, or pay any bonus to, any current or former officer, director
or employee (except for normal increases of cash compensation or
cash bonuses in the ordinary course of business consistent with
past practice that, in the aggregate, do not materially increase
the benefits or compensation expenses of the Company), (C) pay any
benefit or amount under any Benefit Plan or Benefit Agreement not
required under such Benefit Plan or Benefit Agreement or any other
benefit plan or arrangement of the Company as in effect on the
date of this Agreement, (D) increase in any manner the severance
or termination pay of any current or former director, officer or
employee, (E) enter into or amend any Benefit Agreement, (F) grant
any awards under any bonus, incentive, performance or other
compensation plan or arrangement or Benefit Plan (including the
grant of stock options, "phantom" stock, stock appreciation
rights, "phantom" stock rights, stock based or stock related
awards, performance units or restricted stock or the removal of
existing restrictions in any Benefit Plans or agreements or awards
made thereunder), (G) amend or modify any Company Stock Option or
Company Stock-Based Award, (H) take any action to fund or in any
other way secure the payment of compensation or benefits under any
employee plan, agreement, contract or arrangement or Benefit Plan,
(I) other than as contemplated in Section 5.06, take any action to
accelerate the vesting or payment of any compensation or benefit
under any Benefit Plan or (J) materially change any actuarial or
other assumption used to calculate funding obligations with
respect to any Pension Plan or change the manner in which
contributions to any Pension Plan are made or the basis on which
such contributions are determined;
(xii) except as required by GAAP or otherwise required by
law, revalue any material assets of the Company or any of its
subsidiaries or make (A) any change in accounting principles or
(B) any material change in accounting methods or practices;
(xiii) sell, transfer or license to any person or otherwise
extend, amend or modify any rights to the material Intellectual
Property rights of the Company, other than in the ordinary course
of business consistent with past practice; or
(xiv) authorize any of, or commit, resolve or agree to take
any of, the foregoing actions to the extent prohibited by the
terms of this Agreement.
(b) Other Actions. None of the Company, Parent or Sub shall, nor
shall any of them permit any of its subsidiaries to, knowingly take any
action (or omit to take any action) if such action (or omission) would, or
would reasonably be expected to, result in (i) any of the representations
and warranties of such party set forth in this Agreement that are qualified
as to materiality becoming untrue at or before the Effective Time, (ii) any
of such representations and warranties that are not so qualified becoming
untrue in any material respect at or before the Effective Time or (iii) any
of the conditions to the Merger set forth in Article VI not being
satisfied.
(c) Advice of Changes; Filings. The Company and Parent shall
promptly advise the other party in writing of (i) any representation or
warranty made by it (and, in the case of Parent, made by Sub) 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 becoming untrue or inaccurate in any material respect or
(ii) the failure of it (or, in the case of Parent, Sub) to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it (or, in the case of Parent, Sub) under
this Agreement; provided, however, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties (or
remedies with respect thereto) or the conditions to the obligations of the
parties under this Agreement. The Company and Parent shall promptly provide
the other with copies of all filings made by such party with any
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby, other than the portions of such filings that include
confidential information not directly related to the transactions
contemplated by this Agreement.
(d) Certain Tax Matters. During the period from the date of this
Agreement to the Effective Time, (i) the Company shall, and shall cause
each of its subsidiaries to, timely file all Federal, state and local,
domestic and foreign, income and franchise tax returns and reports and all
other material tax returns and reports ("Post-Signing Returns") required to
be filed by each such entity (after taking into account any applicable
extensions); (ii) the Company and its subsidiaries shall timely pay all
taxes due and payable with respect to such Post-Signing Returns that are so
filed; (iii) the Company shall accrue a reserve in its books and records
and financial statements in accordance with past practice for all taxes
payable by the Company or any of its subsidiaries for which no Post-Signing
Return is due prior to the Effective Time; (iv) the Company shall promptly
notify Parent of any material action, suit, proceeding, claim or audit
pending against or with respect to the Company or any of its subsidiaries
in respect of any tax matter and shall not settle or compromise any such
action, suit, proceeding, claim or audit without Parent's prior written
consent; and (v) none of the Company or any of its subsidiaries shall make
or change any material tax election without Parent's prior written consent.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor
shall it permit any of its subsidiaries to, nor shall it authorize any
director, officer or employee of the Company or any of its subsidiaries or
any investment banker, attorney, accountant or other advisor or
representative of the Company or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage, or take any other action
knowingly to facilitate, any Takeover Proposal (as defined below) or any
inquiries or the making of any proposal that constitutes or could
reasonably be expected to lead to a Takeover Proposal or (ii) enter into,
continue or otherwise participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
otherwise cooperate in any way with, any Takeover Proposal; provided,
however, that, at any time prior to obtaining the Company Shareholder
Approval, the Company may, in response to a bona fide written Takeover
Proposal that the Board of Directors of the Company determines in good
faith constitutes or is reasonably likely to lead to a Superior Proposal
(as defined below), and which Takeover Proposal did not result from a
breach of this Section 4.02, and subject to compliance with paragraphs (c)
and (d) of this Section 4.02, participate in discussions or negotiations
regarding such Takeover Proposal and furnish information with respect to
the Company and its subsidiaries to the person making such Takeover
Proposal (and its representatives) pursuant to a customary confidentiality
agreement. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
director, officer or employee of the Company or any of its subsidiaries or
any investment banker, attorney, accountant or other advisor or
representative of the Company or any of its subsidiaries shall be deemed to
be a breach of this Section 4.02(a) by the Company.
For purposes of this Agreement (except as set forth in Section
5.07(b)), the term "Takeover Proposal" means any inquiry, proposal or offer
from any person relating to, or that is reasonably likely to lead to, any
direct or indirect acquisition, in one transaction or a series of
transactions, including any merger, tender offer, exchange offer, stock
acquisition, asset acquisition, statutory share exchange, business
combination, recapitalization, liquidation, dissolution, joint venture or
similar transaction, other than the transactions contemplated by this
Agreement, of (A) assets or businesses that constitute or represent 20% or
more of the total revenue, operating income, EBITDA or assets of the
Company and its subsidiaries, taken as a whole, (B) 20% or more of the
outstanding shares of Company Common Stock or (C) 20% or more of the
outstanding shares of capital stock of, or other equity or voting interests
in, any of the Company's subsidiaries directly or indirectly holding,
individually or taken together, the assets or businesses referred to in
clause (A) above.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw (or modify in a manner adverse to
Parent) or propose publicly to withdraw (or modify in a manner adverse to
Parent) the recommendation by such Board of Directors or any such committee
to the shareholders of the Company that such shareholders approve this
Agreement and the Merger, or resolve or agree to take any such action (each
such action being referred to as an "Adverse Recommendation Change"),
unless the Board of Directors determines in good faith, based on such
matters as it deems appropriate, after consulting with legal counsel, that
the failure to make an Adverse Recommendation Change would be reasonably
likely to result in a breach of its fiduciary duties under applicable law,
(ii) adopt or approve, or propose publicly to adopt or approve, any
Takeover Proposal, or resolve or agree to take any such action or (iii)
cause or permit the Company to enter into any letter of intent, memorandum
of understanding, agreement in principle, acquisition agreement, merger
agreement, option agreement, joint venture agreement, partnership agreement
or other agreement (other than a confidentiality agreement referred to in
Section 4.02(a)) (an "Acquisition Agreement") constituting or related to,
or which is intended to or is reasonably likely to lead to, any Takeover
Proposal, or resolve or agree to take any such action. Notwithstanding the
foregoing, at any time prior to obtaining the Company Shareholder Approval,
the Board of Directors of the Company may, in response to a Superior
Proposal, cause the Company to terminate this Agreement pursuant to Section
7.01(f) and concurrently enter into an Acquisition Agreement; provided,
however, that the Company shall not have the right to terminate this
Agreement pursuant to Section 7.01(f) unless the Company shall have paid to
Parent the Termination Fee prior to or concurrently with such termination;
and provided further, however, that the Company shall not be entitled to
exercise its right to terminate this Agreement pursuant to Section 7.01(f)
until after the third business day following Parent's receipt of a written
notice (a "Notice of Superior Proposal") from the Company advising Parent
that the Board of Directors of the Company has received a Superior Proposal
and specifying the terms and conditions of such Superior Proposal and
identifying the person making such Superior Proposal (it being understood
and agreed that any amendment to the price or any other material term of a
Superior Proposal shall require a new Notice of Superior Proposal and a new
three business day period). It is understood and agreed that the
termination of this Agreement in accordance with the previous sentence
shall not constitute a breach of any provision of this Agreement.
The term "Superior Proposal" means any bona fide written offer
made by a third party that if consummated would result in such third party
(or its shareholders) owning, directly or indirectly, more than 80% of the
shares of Company Common Stock then outstanding (or of the shares of the
surviving entity in a merger involving the Company or the direct or
indirect parent of the surviving entity in a merger involving the Company)
or all or substantially all the assets of the Company and its subsidiaries,
taken as a whole, and otherwise on terms that the Board of Directors of the
Company determines in its good faith judgment (after consultation with a
financial advisor of nationally recognized reputation) to be more favorable
to the Company's shareholders than the Merger, taking into account, among
other things, (x) any changes to the terms of this Agreement proposed by
Parent in response to such third-party written offer or otherwise and (y)
the conditions to consummating such third-party written offer (including
those relating to financing).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company shall promptly
advise Parent orally and in writing of any Takeover Proposal or any request
for information or inquiry that the Company reasonably believes could lead
to a Takeover Proposal, the material terms and conditions of such Takeover
Proposal, request or inquiry (including any subsequent material amendments
or modifications to such terms and conditions) and the identity of the
person making any such Takeover Proposal, request or inquiry. The Company
shall keep Parent informed in all material respects as to the status and
details (including material amendments or proposed amendments) of any such
Takeover Proposal, request or inquiry.
(d) Nothing contained in this Section 4.02 or elsewhere in this
Agreement shall prohibit the Company from (i) taking and disclosing to its
shareholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or (ii) making any disclosure to the Company's shareholders
if, in the good faith judgment of the Board of Directors of the Company,
after consultation with outside counsel, failure to do so would be
inconsistent with its obligations under applicable law; provided, however,
that in no event shall the Company or its Board of Directors or any
committee thereof take, agree or resolve to take, any action prohibited by
Section 4.02(b)(i) or 4.02(b)(ii) pursuant to this Section 4.02(d).
ARTICLE V
Additional Agreements
SECTION 5.01. Preparation of the Proxy Statement. As promptly as
practicable following the date of this Agreement, the Company shall prepare
and file with the SEC the Proxy Statement. Each of the parties shall
furnish all information concerning itself and its affiliates that is
required to be included in the Proxy Statement or that is customarily
included in proxy statements prepared in connection with transactions of
the type contemplated by this Agreement. The Company shall use its
reasonable best efforts to respond as promptly as practical to any comments
of the SEC with respect to the Proxy Statement and to cause the Proxy
Statement to be mailed to the Company's shareholders as promptly as
practicable after the date of this Agreement. The Company shall promptly
notify Parent upon the receipt of any comments from the SEC or its staff or
any request from the SEC or its staff for amendments or supplements to the
Proxy Statement or for additional information and shall provide Parent with
copies of all correspondence between the Company and its representatives,
on the one hand, and the SEC and its staff, on the other hand. If at any
time prior to the Effective Time any information relating to the Company or
Parent, or any of their respective directors, officers or affiliates,
should be discovered by the Company or Parent which should be set forth in
an amendment or supplement to the Proxy Statement, so that the Proxy
Statement would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other parties
and an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required by law,
disseminated to the shareholders of the Company. Notwithstanding anything
to the contrary stated above, prior to filing or mailing the Proxy
Statement (or any amendment or supplement thereto) or responding to any
comments of the SEC with respect thereto, the Company shall (i) provide
Parent an opportunity to review, comment on and approve such document or
response, (ii) include in such document or response all comments reasonably
proposed by Parent and (iii) not file or mail such document or respond to
the SEC prior to receiving Parent's approval, which approval shall not be
unreasonably withheld or delayed. The Company agrees that the Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 5.02. Company Shareholders Meeting. The Company shall, as
soon as practicable following the date of this Agreement, establish a
record date (which will be as soon as practicable following the date of
this Agreement) for, duly call, give notice of, convene and hold a meeting
of its shareholders (the "Company Shareholders Meeting") for the purpose of
obtaining the Company Shareholder Approval. The Company shall cause the
Company Shareholders Meeting to be held as promptly as practicable after
the date of this Agreement. Subject to Section 4.02(b)(i), the Company
shall, through its Board of Directors, recommend to its shareholders that
they approve this Agreement and shall include such recommendation in the
Proxy Statement. Without limiting the generality of the foregoing, the
Company agrees that its obligations pursuant to this Section 5.02 shall not
be affected by (i) the commencement, public proposal, public disclosure or
communication to the Company or any other person of any Takeover Proposal
or (ii) the withdrawal or modification by the Board of Directors of the
Company or any committee thereof of such Board of Directors' or such
committee's approval or recommendation of the Merger or this Agreement.
SECTION 5.03. Access to Information. Except as set forth in
Section 5.03 of the Company Disclosure Schedule, upon reasonable notice,
the Company shall, and shall cause each of its subsidiaries to (in order to
permit Parent to evaluate the transactions contemplated by this Agreement),
(i) at reasonable intervals from time to time, confer with Parent to report
on operational matters and other matters reasonably requested by Parent and
(ii) afford to Parent and to its officers, employees, accountants, counsel
and other representatives, reasonable access, during normal business hours
during the period prior to the Effective Time, to their respective
properties, books, contracts, commitments, directors, officers, attorneys,
accountants, auditors (and, to the extent within the Company's control,
former auditors), other advisors and representatives, records and
personnel, but only to the extent that such access does not unreasonably
interfere with the business or operations of the Company or any such
subsidiary, and, during such period, the Company shall, and shall cause
each of its subsidiaries to, furnish promptly to Parent (a) a copy of each
material report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of
Federal, state or local, domestic or foreign, laws and (b) such other
information concerning its business, properties and personnel as Parent may
reasonably request; provided, however, that the Company shall not be
required to (or to cause any of its subsidiaries to) so confer, afford such
access or furnish such copies or other information if doing so would, or
would reasonably be expected to, subject the Company to liability under, or
constitute a violation of, applicable laws or confidentiality obligations
to a third party. All such information shall constitute Information (as
such term is defined in the Confidentiality Agreement dated as of November
6, 2001, between the Company and Parent (the "Confidentiality Agreement"))
and shall be subject thereto as provided therein, and Parent shall, and
shall cause its advisors and representatives who receive Information to
agree to, hold all such Information in confidence to the extent required
by, and in accordance with, the terms of the Confidentiality Agreement. The
Confidentiality Agreement shall survive any termination of this Agreement.
SECTION 5.04. Reasonable Best Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees
to use its reasonable best efforts to take, or cause to be taken, all
actions, that are necessary, proper or advisable to consummate and make
effective the Merger and the other transactions contemplated by this
Agreement and the Shareholder Agreement, including using its reasonable
best efforts to accomplish the following: (i) the taking of all reasonable
acts necessary to cause the conditions precedent set forth in Article VI to
be satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and
filings (including registrations, declarations and filings with
Governmental Entities, if any), (iii) the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or
proceeding by a Governmental Entity and (iv) the obtaining of all necessary
consents, approvals or waivers from third parties. In connection with and
without limiting the foregoing, the Company and its Board of Directors
shall, if any state takeover statute or similar statute or regulation is or
becomes applicable to this Agreement, the Shareholder Agreement, the Merger
or any of the other transactions contemplated hereby or thereby, use their
reasonable best efforts to ensure that the Merger and the other
transactions contemplated hereby or thereby may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement, the
Shareholder Agreement, the Merger and the other transactions contemplated
hereby or thereby. If any objections are asserted with respect to the
transactions contemplated by this Agreement under any antitrust or
competition law, each of Parent and the Company shall use its reasonable
best efforts and cause its subsidiaries to use their reasonable best
efforts to resolve any such objections so as to permit consummation of the
transactions contemplated by this Agreement. Notwithstanding the foregoing
or any other provision of this Agreement to the contrary, in no event shall
any party hereto be obligated to (A) agree to, or proffer to, divest or
hold separate, or enter into any licensing or similar arrangement with
respect to, any assets (whether tangible or intangible) or any portion of
any business of Parent, the Company or any of their respective subsidiaries
or (B) litigate any suit, claim, action, investigation or proceeding,
whether judicial or administrative, brought by any Governmental Entity (1)
challenging or seeking to restrain or prohibit the consummation of the
Merger; (2) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective affiliates of any portion of the
business or assets of the Company or its subsidiaries or Parent or its
subsidiaries or to require any such person to dispose of or hold separate
any portion of the business or assets of the Company or its subsidiaries,
or Parent or its subsidiaries, as a result of the Merger; or (3) seeking to
prohibit Parent or any of its affiliates from effectively controlling the
business or operations of the Company or its subsidiaries. The Company and
Parent will provide such assistance, information and cooperation to each
other as is reasonably required to obtain any such nonactions, waivers,
consents, approvals, orders and authorizations and, in connection
therewith, will notify the other person promptly following the receipt of
any comments or requests from any Governmental Entity for amendments,
supplements or additional information in respect of any registration,
declaration or filing with such Governmental Entity and will supply the
other person with copies of all correspondence between such person or any
of its representatives, on the one hand, and any Governmental Entity, on
the other hand.
SECTION 5.05. Employee Matters. (a) For a period of not less than
one year after the Effective Time, employees of the Company and its
subsidiaries who continue their employment after the Effective Time (the
"Affected Employees") shall be provided cash compensation (including bonus
opportunity) and employee benefits that are substantially comparable in the
aggregate to those provided to the Affected Employees immediately prior to
the Effective Time; provided that Parent agrees to cause the Surviving
Corporation to continue the Company's annual incentive program in effect
for the remainder of 2002 calendar year on the same terms and conditions as
in effect immediately before the Effective Time. Neither Parent nor the
Surviving Corporation shall have any obligation to issue, or adopt any
plans or arrangements providing for the issuance of, shares of capital
stock, warrants, options, stock appreciation rights or other rights in
respect of any shares of capital stock of any entity or any securities
convertible or exchangeable into such shares pursuant to any such plans or
arrangements. Any plans or arrangements of the Company providing for such
issuance shall be disregarded in determining whether employee benefits are
substantially comparable in the aggregate.
(b) Parent shall cause the service of each Affected Employee to be
recognized (i) for purposes of eligibility and vesting (but not benefit
accrual) under any pension program in which the Affected Employee
participates, (ii) for purposes of eligibility under any vacation and/or
sick leave program in which the Affected Employee participates and (iii)
for eligibility and benefit accrual purposes under any severance plan in
which the Affected Employee participates. Notwithstanding the foregoing,
such service shall be recognized only to the extent such Affected Employee
participated in a comparable plan of the Company and its subsidiaries prior
to the Effective Time and only to the extent such service was recognized
under such plan.
(c) With respect to any welfare plan in which Affected Employees
are eligible to participate after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, (i) waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to such Affected
Employees to the extent such conditions were satisfied under the welfare
plans of the Company and its subsidiaries prior to the Effective Time and
(ii) provide each such Affected Employee with credit for any co-payments
and deductibles paid prior to the Effective Time in satisfying any
analogous deductible or out-of-pocket requirements to the extent applicable
under any such plan.
(d) Except as provided in subsection (f) below, nothing contained
herein shall be construed as requiring Parent or the Surviving Corporation
to continue any specific plans or to continue the employment of any
specific person.
(e) The Company shall amend the ESPP on the date of this Agreement
to provide that (i) participants may not increase their payroll deductions
or purchase elections from those in effect on the date of this Agreement,
(ii) no offering periods shall be commenced after the date of this
Agreement, (iii) each participant's outstanding right to purchase shares of
Company Common Stock under the ESPP shall terminate immediately prior to
the Effective Time in exchange for a cash payment in an amount equal to the
excess, if any, of (A) the product of (1) the number of shares of Company
Common Stock that could have been purchased with such participant's
accumulated payroll deductions immediately prior to the Effective Time (the
"Applicable ESPP Shares") at the applicable option price determined in
accordance with the terms of the ESPP (the "Applicable ESPP Price") and (2)
the Merger Consideration, over (B) the product of the number of Applicable
ESPP Shares and the Applicable ESPP Price and (iv) the ESPP shall terminate
at the Effective Time.
(f) Parent shall, and shall cause the Surviving Corporation to,
honor all Benefit Agreements and Company severance policies identified or
described in Section 5.05(f) of the Company Disclosure Schedule in
accordance with their terms as in effect immediately before the Effective
Time, subject to any right to amend or terminate any Benefit Agreement as
permitted in accordance with such terms. Parent will recalculate the
cutback provided for in Section 5 of such Benefit Agreements on the third
anniversary of the termination of any employee party thereto whose
compensation or benefits were reduced as a result of the application of
such Section 5 to take into account the termination prior to the
recalculation date of the continued medical benefits provided under such
Benefit Agreement. Parent will make any payment that it determines can be
made to any such employee consistently with such Section 5; provided that
Parent shall not be required to make any payment that Parent determines, in
its sole and absolute discretion, could result in any such employee
receiving any "excess parachute payment" (as contemplated by Section 280G
of the Code). For the avoidance of doubt, Parent shall not be required to
make any payment or take any action that it determines in its sole and
absolute discretion, could jeopardize the deductibility of any "parachute
payment" (as contemplated by Section 280G of the Code) made to any such
employee.
SECTION 5.06. Stock Based Awards. On or as soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Company Stock Plans)
shall adopt such resolutions or take such other actions (if any), including
amending such Company Stock Plans and obtaining appropriate consents
thereto, as may be required to cause:
(i) each holder of each Company Stock Option outstanding
immediately prior to the Effective Time, whether vested or
unvested, to become entitled to receive as promptly as practicable
after the Effective Time an amount in cash equal to (A) the
excess, if any, of (1) the Merger Consideration over (2) the
exercise price per share of Company Common Stock subject to such
Company Stock Option, multiplied by (B) the number of shares of
Company Common Stock for which such Company Stock Option shall not
theretofore have been exercised, plus (C) to the extent
applicable, an additional payment in accordance with the Company
policy described in Section 5.06(i) of the Company Disclosure
Schedule; and
(ii) rights of any kind, whether vested or unvested,
contingent or accrued, to acquire or receive shares of Company
Common Stock or to receive benefits measured by the value of a
number of shares of Company Common Stock, that may be held,
awarded, outstanding, credited, payable or reserved for issuance
under the Company Stock Plans and any other Benefit Plan, except
for Company Stock Options converted in accordance with clause (i)
above (each, a "Company Stock-Based Award"), that are outstanding
immediately prior to the Effective Time (other than pursuant to
the agreements identified in Section 5.06(ii) of the Company
Disclosure Schedule) to be converted into a fully-vested right to
receive cash in an amount equal to the product of (A) the Merger
Consideration and (B) the number of shares of Company Common Stock
subject to such Company Stock-Based Award. The cash value of any
converted Company Stock-Based Award shall be distributed in
accordance with the terms of such Company Stock-Based Award. To
the extent the cash value of such Company Stock-Based Award is not
paid or distributed at the Effective Time, the value of such
Company Stock-Based Award after the Effective Time shall be
measured without regard to the value of Company Common Stock and
shall instead be credited with earnings or losses by reference to,
at the holder's election, either any other alternative deemed
investment or investments that may be generally available
immediately prior to the Effective Time under the plan or other
arrangement under which the Company Stock-Based Award is
outstanding at such time or such other deemed investment or
investments as the appropriate officers of the Surviving
Corporation may from time to time establish for such purpose.
SECTION 5.07. Fees and Expenses; Termination Fee. (a) Whether or
not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs or expenses.
(b) In the event that (i) (A) a Takeover Proposal has been made to
the Company or its shareholders or any person has announced an intention
(whether or not conditional) to make a Takeover Proposal, and such Takeover
Proposal or announced intention remains outstanding at the date of the
Company Shareholders Meeting, (B) thereafter this Agreement is terminated
by either Parent or the Company (x) pursuant to Section 7.01(b)(i) without
the Company Shareholder Approval having been obtained prior to the date of
such termination or (y) pursuant to Section 7.01(b)(iv) and (C) within 12
months after such termination, the Company or any of its subsidiaries
enters into any Acquisition Agreement with respect to, or consummates, any
Takeover Proposal (solely for purposes of this Section 5.07(b)(i)(C), the
term "Takeover Proposal" shall have the meaning set forth in the definition
of Takeover Proposal contained in Section 4.02(a) except that all
references to 20% therein shall be deemed references to 40%), (ii) this
Agreement is terminated by Parent pursuant to Section 7.01(c) or (iii) this
Agreement is terminated by the Company pursuant to Section 7.01(f), then
the Company shall pay Parent a fee equal to $12,500,000 (the "Termination
Fee") by wire transfer of same day funds to an account designated by Parent
(x) in the case of a termination by the Company pursuant to Section
7.01(f), prior to or concurrently with such termination, (y) in the case of
a termination by Parent pursuant to Section 7.01(c), within two business
days after such termination and (z) in the case of a payment as a result of
any event referred to in Section 5.07(b)(i)(C), upon the first to occur of
such events.
(c) The Company acknowledges and agrees that the agreement
contained in Section 5.07(b) is an integral part of the transactions
contemplated by this Agreement, and that, without such agreement, Parent
would not enter into this Agreement; accordingly, if the Company fails
promptly to pay any amount due pursuant to Section 5.07(b), and, in order
to obtain such payment, Parent commences a suit that results in a judgment
against the Company for any of the amounts due to Parent pursuant to
Section 5.07(b), the Company shall pay to Parent its costs and expenses
(including attorneys' fees and expenses) in connection with such suit,
together with interest on the amounts due to Parent pursuant to Section
5.07(b) from the date such payment was required to be made until the date
of payment at the prime rate of Citibank, N.A. in effect on the date such
payment was required to be made.
SECTION 5.08. Indemnification, Exculpation and Insurance. (a) All
rights to indemnification and exculpation from liability for acts or
omissions occurring at or prior to the Effective Time and rights to
advancement of expenses relating thereto now existing in favor of the
current or former directors or officers of the Company and its subsidiaries
(such persons, "Indemnified Persons"), as provided in their respective
articles of incorporation or by-laws (or comparable organizational
documents) and any existing indemnification agreements or arrangements of
the Company or any of its subsidiaries shall survive the Merger and shall
not be amended, repealed or otherwise modified in any manner that would
adversely affect the rights thereunder of any such Indemnified Persons. The
parties agree that the Surviving Corporation shall maintain, for a period
of six years from the Effective Time, the run-off policy (including any
excess limits coverage purchased in connection therewith) that the Company
contemplates purchasing prior to the Effective Time under the Company's
current directors' and officers' insurance and indemnification policy (the
"D&O Insurance") to provide coverage for events occurring at or prior to
the Effective Time for all Indemnified Persons (the "Run-Off D&O Policy").
The Company covenants and agrees that the total premium for the Run-Off D&O
Policy (including any excess limits coverage purchased in connection
therewith) will not exceed the sum of (x) 250% of the last annual premium
payable with respect to the D&O Insurance prior to the date of this
Agreement, which the Company represents and warrants was $190,000, and (y)
the amount of any pro rata return premium with respect to the D&O Insurance
received by the Company in connection with the purchase of the Run-Off D&O
Policy (such sum, the "Maximum Premium"); provided, however, that the
Surviving Corporation may, in lieu of maintaining the Run-Off D&O Policy as
provided above, cause comparable coverage to be provided under any policy
issued by a reputable insurance company, so long as the material terms
thereof, including coverage and amount, are no less favorable to the
Indemnified Persons than the existing D&O Insurance. If the Company is
unable to obtain the Run-Off D&O Policy or the Run-Off D&O Policy expires,
is terminated or is canceled during such six-year period, the Surviving
Corporation shall cause to be obtained as much directors' and officers'
insurance covering the Indemnified Persons as can be obtained for the
remainder of such period for an aggregate premium not in excess of the
Maximum Premium.
(b) The parties agree that the provisions of this Section 5.08 are
(i) intended to be for the benefit of, and shall be enforceable by, each
Indemnified Person and each Indemnified Person's heirs and representatives
and (ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract
or otherwise. The parties agree that in the event that the Surviving
Corporation or any of its successors or assigns (i) consolidates with or
merges into any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all of its properties and assets to any
person, then, and in each such case, proper provision shall be made by such
person so that the successors and assigns of the Surviving Corporation
assume the obligations of the parties and the Surviving Corporation set
forth in this Section 5.08. In the event that the Surviving Corporation
transfers any material portion of its assets, in a single transaction or in
a series of transactions, Parent shall take such action as may be necessary
to ensure that the ability of the Surviving Corporation, legal and
financial, to satisfy the indemnification obligations set forth in this
Section 5.08(a) will not be diminished in any material respect.
SECTION 5.09. Shareholder Litigation. The Company shall give
Parent the opportunity to participate in the defense or settlement of any
shareholder litigation against the Company and/or its directors relating to
the transactions contemplated by this Agreement or the Shareholder
Agreement, and no such settlement shall be agreed to without Parent's prior
written consent, which consent shall not be unreasonably withheld.
SECTION 5.10. Rights Agreement. The Board of Directors of the
Company shall take all further action (in addition to that referred to in
Section 3.01(r)) requested by Parent in order to render the Rights
inapplicable to the Merger and the other transactions contemplated by this
Agreement and the Shareholder Agreement. Except as provided above with
respect to the Merger and the other transactions contemplated by this
Agreement and the Shareholder Agreement, the Board of Directors of the
Company shall not, without the prior written consent of Parent, (i) amend
the Rights Agreement (other than any such amendment solely to ensure that
the Rights remain redeemable) or (ii) take any action with respect to, or
make any determination under, the Rights Agreement, including a redemption
of the Rights or any action to facilitate a Takeover Proposal.
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Company Shareholder Approval. The Company Shareholder Approval
shall have been obtained.
(b) Antitrust. The waiting period applicable to the Merger under
each of the HSR Act and the Federal Republic of Germany's Act Against
Restraints of Competition 1957 (GWB), as amended, shall have expired or
been terminated. Any other consents, approvals and filings under any
foreign antitrust law, the absence of which would prohibit the consummation
of the Merger, shall have been obtained or made, except for those the
failure of which to be obtained or made would not reasonably be expected to
have a Material Adverse Effect.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order or
decree issued by any court of competent jurisdiction or other legal
restraint or prohibition (collectively, "Legal Restraints") that has the
effect of preventing the consummation of the Merger shall be in effect.
SECTION 6.02. Conditions to Obligations of Parent and Sub To
Effect the Merger. The obligations of Parent and Sub to effect the Merger
are further subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company shall be true and correct as of the Closing Date
as though made on and as of the Closing Date (except to the extent any such
representations and warranties expressly relate to an earlier date, in
which case as of such earlier date), except where the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to materiality or Material Adverse Effect set
forth therein) would not reasonably be expected to have a Material Adverse
Effect, and Parent shall have received a certificate to such effect signed
on behalf of the Company by its chief executive officer and its chief
financial officer.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate to such effect signed on behalf of
the Company by its chief executive officer and its chief financial officer.
(c) No Litigation. There shall not be pending any suit, action or
proceeding brought by any Governmental Entity (i) challenging or seeking to
restrain or prohibit the consummation of the Merger, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any
of their respective affiliates of any portion of the business or assets of
the Company, Parent or any such affiliate, or to require any such person to
divest or hold separate any portion of its business or assets, as a result
of the Merger or (iii) seeking to impose limitations on the ability of
Parent or any of its affiliates to acquire or hold, or exercise full rights
of ownership of, any shares of Company Common Stock, including the right to
vote the Company Common Stock on all matters properly presented to the
shareholders of the Company or (iv) seeking to prohibit Parent or any of
its affiliates from effectively controlling the business or operations of
the Company or its subsidiaries.
SECTION 6.03. Conditions to Obligation of the Company To Effect
the Merger. The obligation of the Company to effect the Merger is further
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement that are qualified
as to materiality shall be true and correct, and the representations and
warranties of Parent and Sub that are not qualified as to materiality shall
be true and correct in all material respects, in each case as of the
Closing Date as though made on and as of the Closing Date (except to the
extent any such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), and the Company shall
have received a certificate to such effect signed on behalf of Parent by an
executive officer of Parent.
(b) Performance of Obligations of Parent and Sub. Each of Parent
and Sub shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and the Company shall have received a certificate to such
effect signed on behalf of Parent by an executive officer of Parent.
SECTION 6.04. Frustration of Closing Conditions. None of Parent,
Sub or the Company may rely on the failure of any condition set forth in
Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied if such
failure was caused by such party's failure to use its reasonable best
efforts to consummate the Merger and the other transactions contemplated by
this Agreement and the Shareholder Agreement, as required by and subject to
Section 5.04.
ARTICLE VII
Termination and Amendment
SECTION 7.01. Termination. This Agreement may be terminated, and
the Merger contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after the Company Shareholder Approval
has been obtained:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or
before December 31, 2002 (as such date may be extended pursuant to
this clause (i), the "Outside Date"); provided, however, that the
right to terminate this Agreement pursuant to this Section
7.01(b)(i) shall not be available to any party whose action or
failure to act has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date and such
action or failure to act constitutes a breach of this Agreement;
and provided further, however, that, in the event that the
conditions set forth in Sections 6.01(b) or 6.01(c) (to the
extent, but only to the extent, that the underlying Legal
Restraint was issued upon the application of a person other than a
Governmental Entity) shall not have been satisfied by such date,
either Parent or the Company may unilaterally extend the Outside
Date by written notice to the other by December 31, 2002, in which
case the Outside Date shall instead be March 31, 2003;
(ii) upon the receipt by either party of notice from any
Governmental Entity of its intent to file or bring any suit,
action or proceeding, whether administrative or judicial, seeking
to restrain, prohibit or enjoin the consummation of the Merger;
(iii) if (A) any Legal Restraint having the effect set forth
in Section 6.01(c) issued upon the application of any Governmental
Entity shall be in effect or (B) any such Legal Restraint issued
upon the application of any other person shall be in effect and
shall have become final and nonappealable; or
(iv) if the Company Shareholder Approval shall not have been
obtained at the Company Shareholders Meeting duly convened
therefor or at any adjournment or postponement thereof;
(c) by Parent in the event an Adverse Recommendation Change has
occurred;
(d) by Parent if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
6.02(a) or 6.02(b) and (ii) has not been or is incapable of being cured by
the Company within 30 calendar days after its receipt of written notice
thereof from Parent;
(e) by the Company if Parent shall have breached or failed to
perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
6.03(a) or 6.03(b) and (ii) has not been or is incapable of being cured by
Parent within 30 calendar days after its receipt of written notice thereof
from the Company; or
(f) by the Company in accordance with the terms and subject to the
conditions of Section 4.02(b).
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement by either Parent or the Company as provided in Section
7.01, this Agreement shall forthwith become void and have no effect, and
there shall be no liability or obligation on the part of Parent, Sub or the
Company, except with respect to Section 3.01(s), Section 3.02(g), the
second and third sentences of Section 5.03, Section 5.07, this Section 7.02
and Article VIII (except Section 8.07 therein), which provisions shall
survive such termination; provided, however, that no such termination shall
relieve any party hereto from any liability or damages resulting from the
willful and material breach by a party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time, whether before or after the Company Shareholder
Approval has been obtained; provided, however, that after the Company
Shareholder Approval has been obtained, no amendment shall be made which by
law requires further approval by the shareholders of the Company without
such further approval having been obtained. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (c) subject to the proviso to
the first sentence of Section 7.03, waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a
party to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party. The failure of any party
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights nor shall any single or partial
exercise by any party to this Agreement of any of its rights under this
Agreement preclude any other or further exercise of such rights or any
other rights under this Agreement.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01 or an
amendment of this Agreement pursuant to Section 7.03 shall, in order to be
effective, require, in the case of Parent or the Company, action by its
Board of Directors or, with respect to any amendment of this Agreement
pursuant to Section 7.03, the duly authorized committee or other designee
of its Board of Directors to the extent permitted by law.
ARTICLE VIII
General Provisions
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective
Time.
SECTION 8.02. Notices. Except for notices that are specifically
required by the terms of this Agreement to be delivered orally, all notices
and other communications hereunder shall be in writing and shall be deemed
given if delivered personally, telecopied (with confirmation) or sent by
overnight or same-day courier (providing proof of delivery) to the parties
at the following addresses (or at such other address for a party as shall
be specified by like notice):
(a) if to the Company, to:
ChemFirst Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention of J. Xxxxx Xxxxxx, Esq.
General Counsel
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention of Xxxxxxx X. Xxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000; and
(b) if to Parent or Sub, to:
E. I. du Pont de Nemours and Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention of Xxxx X. Xxxx, Esq.
Corporate Counsel
Facsimile: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of Xxxxxx Cami, Esq.
Facsimile: (000) 000-0000.
SECTION 8.03. Definitions; Interpretation. (a) As used in this
Agreement:
(i) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person, where "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of
voting securities, by contract or otherwise;
(ii) "business day" means any day on which banks are not
required or authorized to close in the City of New York;
(iii) as it relates to the Company or any subsidiary of the
Company, "knowledge" means, with respect to any matter in
question, that any executive officer of the Company has knowledge
of such matter;
(iv) "Material Adverse Change" or "Material Adverse Effect"
means any change, effect, event, occurrence, state of facts or
development that is materially adverse to the business,
properties, assets, liabilities (contingent or otherwise),
financial condition or results of operations of the Company and
its subsidiaries, taken as a whole, other than any change, effect,
event, occurrence, state of facts or development (i) relating to
economic, market (including securities market), regulatory or
political conditions in general, (ii) relating to the industry or
markets in which the Company or any of its subsidiaries operates
in general and not specifically relating to the Company or any of
its subsidiaries or (iii) resulting from the execution or
announcement of this Agreement or the Shareholder Agreement or the
consummation of the Merger;
(v) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity; and
(vi) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its board of directors or other governing body (or, if
there are not such voting interests, more than 50% of the equity
interests of which) is owned directly or indirectly by such first
person.
(b) When a reference is made in this Agreement to a party or to an
Article, Section, Exhibit or Schedule, such reference shall be to a party
to, an Article or Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term "or" when used in this
Agreement is not exclusive. All terms defined in this Agreement shall have
the defined meanings 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. Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a
person are also to its permitted successors and assigns.
SECTION 8.04. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party.
SECTION 8.05. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, together with the Confidentiality Agreement, (a) constitutes the
entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; provided that the Confidentiality Agreement shall survive the
execution and delivery of this Agreement, and (b) other than Section 5.08,
is not intended to confer upon any person other than the parties any rights
or remedies hereunder.
SECTION 8.06. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to any principles of conflicts of law of such State, except to the
extent that the laws of the State of Mississippi are mandatorily applicable
to the Merger.
SECTION 8.07. Publicity. Except as otherwise permitted by this
Agreement or required by law or the rules of the NYSE, so long as this
Agreement is in effect, none of Parent, Sub or the Company shall, or shall
permit any of their respective affiliates to, issue or cause the
publication of any press release or other public announcement or statement
(any of the foregoing, a "Public Statement") with respect to this Agreement
or the transactions contemplated hereby without first obtaining the consent
of the Company, in the case of Parent or Sub, or Parent, in the case of the
Company; provided that, if any such Public Statement is required by law or
the rules of the NYSE, the party subject to such requirement will use its
reasonable best efforts to consult in good faith with and obtain the
consent of the Company, in the case of Parent or Sub, or Parent, in the
case of the Company, prior to publication of such Public Statement . The
parties agree that the initial press release to be issued with respect to
the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
SECTION 8.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, in whole or
in part, by any of the parties (whether by operation of law or otherwise)
without the prior written consent of the other parties, and any such
assignment that is not so consented to shall be null and void.
SECTION 8.09. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of New York, this being
in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties (a) consents to submit itself to
the personal jurisdiction of any Federal court located in the State of New
York in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement and (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court.
SECTION 8.10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
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
or legal substance of the transactions contemplated hereby 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 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.
IN WITNESS WHEREOF, Parent, Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first above written.
E. I. DU PONT DE NEMOURS AND COMPANY,
by /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director, Merger & Acquisition
PURPLE ACQUISITION CORPORATION,
by /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CHEMFIRST INC.,
by /s/ J. Xxxxxx Xxxxxxxx
------------------------------------
Name: J. Xxxxxx Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
ANNEX I
TO THE MERGER AGREEMENT
Index of Defined Terms
Term
Acquisition Agreement...................................Section 4.02(b)
Adverse Recommendation Change.......................... Section 4.02(b)
Affected Employees......................................Section 5.05(a)
affiliate...............................................Section 8.03(a)
Applicable ESPP Price...................................Section 5.05(e)
Applicable ESPP Shares..................................Section 5.05(e)
Agreement......................................................Preamble
Articles of Merger.........................................Section 1.03
Benefit Agreements......................................Section 3.01(g)
Benefit Plans...........................................Section 3.01(m)
business day............................................Section 8.03(a)
Certificate.............................................Section 2.01(c)
Closing....................................................Section 1.02
Closing Date...............................................Section 1.02
Code....................................................Section 2.02(h)
Commonly Controlled Entity..............................Section 3.01(m)
Company........................................................Preamble
Company Common Stock...........................................Recitals
Company Disclosure Schedule................................Section 3.01
Company Filed SEC Document.................................Section 3.01
Company Preferred Stock.................................Section 3.01(c)
Company SEC Documents...................................Section 3.01(e)
Company Shareholder Approval............................Section 3.01(p)
Company Shareholders Meeting...............................Section 5.02
Company Stock-Based Award..................................Section 5.06
Company Stock Options ..................................Section 3.01(c)
Company Stock Plans.....................................Section 3.01(c)
Confidentiality Agreement..................................Section 5.03
control.................................................Section 8.03(a)
D&O Insurance...........................................Section 5.08(a)
Effective Time.............................................Section 1.03
Environmental Laws......................................Section 3.01(l)
ERISA...................................................Section 3.01(n)
ESPP....................................................Section 3.01(c)
Exchange Act............................................Section 3.01(d)
Exchange Fund...........................................Section 2.02(a)
GAAP....................................................Section 3.01(e)
Governmental Entity.....................................Section 3.01(d)
Hazardous Materials.....................................Section 3.01(l)
HSR Act.................................................Section 3.01(d)
Indemnified Persons.....................................Section 5.08(a)
Intellectual Property...................................Section 3.01(v)
IRS.....................................................Section 3.01(n)
KeyCorp................................................ Section 3.01(c)
knowledge...............................................Section 8.03(a)
Legal Restraints........................................Section 6.01(c)
Liens...................................................Section 3.01(b)
Material Adverse Change.................................Section 8.03(a)
Material Adverse Effect.................................Section 8.03(a)
Maximum Premium.........................................Section 5.08(a)
MBCA.......................................................Section 1.01
Merger.........................................................Recitals
Merger Consideration....................................Section 2.01(c)
Notice of Superior Proposal.............................Section 4.02(b)
NYSE....................................................Section 3.01(d)
Outside Date............................................Section 7.01(b)
Parent.........................................................Preamble
Paying Agent............................................Section 2.02(a)
Pension Plan............................................Section 3.01(n)
Permits.................................................Section 3.01(k)
person..................................................Section 8.03(a)
Post-Signing Returns....................................Section 4.01(d)
Proxy Statement.........................................Section 3.01(d)
Public Statement...........................................Section 8.07
Release.................................................Section 3.01(l)
Rights..................................................Section 3.01(c)
Rights Agreement........................................Section 3.01(c)
Rights Plan Preferred Stock.............................Section 3.01(c)
Run-Off D&O Policy.........................................Section 5.08
SEC.....................................................Section 3.01(d)
Securities Act..........................................Section 3.01(e)
Shareholder Agreement..........................................Recitals
Sub............................................................Preamble
subsidiary..............................................Section 8.03(a)
Superior Proposal.......................................Section 4.02(b)
Surviving Corporation......................................Section 1.01
Takeover Proposal.......................................Section 4.02(a)
tax.....................................................Section 3.01(i)
Termination Fee.........................................Section 5.07(b)
