EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GEC INCORPORATED
("PARENT"),
GEC ACQUISITION CORP.
("PURCHASER")
AND
TRACOR, INC.
(THE "COMPANY")
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS................................................................... 1
SECTION 1.1 Definitions............................................. 1
SECTION 1.2 Rules of Construction................................... 2
ARTICLE II
THE OFFER..................................................................... 2
SECTION 2.1 The Offer............................................... 2
SECTION 2.2 Company Actions......................................... 3
SECTION 2.3 Stockholder Lists....................................... 4
SECTION 2.4 Composition of the Board of Directors; Section 14(f).... 4
ARTICLE III
THE MERGER.................................................................... 5
SECTION 3.1 The Merger.............................................. 5
SECTION 3.2 Effective Time.......................................... 6
SECTION 3.3 Effect of the Merger.................................... 6
SECTION 3.4 Certificate of Incorporation; Bylaws.................... 6
SECTION 3.5 Directors and Officers.................................. 6
SECTION 3.6 Stock Options and Warrants.............................. 6
SECTION 3.7 Stockholders' Meeting................................... 7
ARTICLE IV
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES............................ 8
SECTION 4.1 Merger Consideration; Conversion and Cancelation of
Securities.............................................. 8
SECTION 4.2 Exchange of Certificates................................ 9
SECTION 4.3 Dissenting Shares.......................................10
SECTION 4.4 Closing.................................................11
SECTION 4.5 Stock Transfer Books....................................11
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................11
SECTION 5.1 Organization and Qualification; Subsidiaries............11
SECTION 5.2 Certificate of Incorporation and Bylaws.................12
SECTION 5.3 Capitalization..........................................12
SECTION 5.4 Authorization of Agreement..............................14
SECTION 5.5 Approvals...............................................14
SECTION 5.6 No Violation............................................15
SECTION 5.7 Reports and Financial Statements........................15
SECTION 5.8 No Undisclosed Liabilities..............................16
SECTION 5.9 No Material Adverse Effect; Conduct.....................17
SECTION 5.10 Schedule 14D-9; Offer Documents; Proxy Statement........17
SECTION 5.11 Properties and Assets...................................18
SECTION 5.12 Material Contracts......................................18
SECTION 5.13 Litigation; Compliance with Laws........................19
SECTION 5.14 Employee Benefit Plans..................................19
SECTION 5.15 Labor Matters...........................................22
SECTION 5.16 Taxes...................................................22
SECTION 5.17 Environmental Matters...................................23
SECTION 5.18 Intellectual Property...................................24
SECTION 5.19 Brokers.................................................24
SECTION 5.20 Opinion of Financial Advisor............................24
SECTION 5.21 Year 2000...............................................25
SECTION 5.22 Insurance...............................................25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES........................25
SECTION 6.1 Organization and Qualification; Subsidiaries............25
SECTION 6.2 Authorization of Agreement..............................25
SECTION 6.3 Approvals...............................................26
SECTION 6.4 No Violation............................................26
SECTION 6.5 Proxy Statement; Schedule 14D-9.........................26
SECTION 6.6 Sufficient Funds........................................27
SECTION 6.7 Brokers.................................................27
ARTICLE VII
COVENANTS.....................................................................27
SECTION 7.1 Conduct of Business of the Company......................27
SECTION 7.2 Prohibited Actions by the Company.......................28
SECTION 7.3 No Solicitation.........................................30
SECTION 7.4 Access to Information...................................33
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SECTION 7.5 Confidentiality Agreement...............................33
SECTION 7.6 Reasonable Efforts......................................34
SECTION 7.7 Permits.................................................34
SECTION 7.8 HSR Act and Exon-Xxxxxx Filings.........................34
SECTION 7.9 Public Announcements....................................35
SECTION 7.10 Employee Agreements.....................................35
SECTION 7.11 Company's Rights Agreement; State Takeover Statutes.....35
SECTION 7.12 Employee Benefit Plans..................................36
SECTION 7.13 Indemnification of Directors and Officers...............37
SECTION 7.14 Event Notices and Other Actions.........................38
SECTION 7.15 Third Party Standstill Agreements;
Tortious Interference...................................39
ARTICLE VIII
CLOSING CONDITIONS............................................................39
SECTION 8.1 Conditions to Obligations of Each Party Under This
Agreement...............................................39
SECTION 8.2 Additional Conditions to Obligations of the Parent
Companies...............................................39
SECTION 8.3 Additional Condition to Obligations of the Company......40
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER.............................................41
SECTION 9.1 Termination.............................................41
SECTION 9.2 Effect of Termination...................................42
SECTION 9.3 Amendment...............................................43
SECTION 9.4 Extension; Waiver.......................................43
SECTION 9.5 Fees, Expenses and Other Payments.......................43
ARTICLE X
GENERAL PROVISIONS............................................................44
SECTION 10.1 Nonsurvival of Representations, Warranties and
Agreements..............................................44
SECTION 10.2 Notices.................................................45
SECTION 10.3 Headings................................................46
SECTION 10.4 Severability............................................46
SECTION 10.5 Entire Agreement........................................46
SECTION 10.6 Assignment..............................................46
SECTION 10.7 Parties in Interest.....................................47
SECTION 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative...47
SECTION 10.9 Governing Law...........................................47
SECTION 10.10 Enforcement.............................................47
SECTION 10.11 Counterparts............................................48
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ANNEXES
Annex A - Schedule of Defined Terms
Annex B - Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 21, 1998 (this
"Agreement"), is by and among GEC Incorporated, a Delaware corporation
("Parent"), GEC Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and Tracor, Inc., a Delaware corporation
("the Company"). Parent and Purchaser are sometimes referred to herein as the
"Parent Companies."
RECITALS:
The respective Boards of Directors of the Company, Parent, and Purchaser
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement.
In furtherance of such acquisition, Parent proposes to cause Purchaser to
make a tender offer (as it may be amended from time to time as permitted under
this Agreement, the "Offer") to purchase all the issued and outstanding shares
of common stock, par value $0.01 per share, of the Company ("Company Common
Stock"), including the associated Company Rights, at a price per share of
Company Common Stock (including the associated Company Right) of $40.00, net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Agreement.
Upon the terms and subject to the conditions of this Agreement and in
accordance with the GCL, Purchaser will merge with and into the Company and the
Company will be the Surviving Corporation.
Simultaneously with the execution and delivery of this Agreement, Parent
and Purchaser, on the one hand, and each member of the Board of Directors of the
Company and certain members of management on the other hand ("Certain
Stockholders"), are entering into an agreement (the "Stockholders Agreement")
pursuant to which Certain Stockholders have agreed to take specified actions in
furtherance of the transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Certain capitalized and other terms used in
this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
SECTION 1.2 Rules of Construction. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. Unless the context otherwise requires, as used in
this Agreement: (a) a term has the meaning ascribed to it; (b) "or" is not
exclusive; (c) whenever the words "include," "includes" or "including" are used,
they shall be deemed to be followed by the words "without limitation;" and (d)
words in the singular include the plural and words in the plural include the
singular.
ARTICLE II
THE OFFER
SECTION 2.1 The Offer.
(a) Subject to the conditions of this Agreement, as promptly as
practicable but in no event later than five Business Days after the date of this
Agreement, Purchaser shall, and Parent shall cause Purchaser to, commence the
Offer within the meaning of the applicable Regulations of the SEC. The
obligation of Purchaser to, and of Parent to cause Purchaser to, commence the
Offer or accept for payment, or pay for, any shares of Company Common Stock
tendered pursuant to the Offer shall be subject to the conditions set forth in
Annex B (any of which may be waived by Purchaser in its sole discretion,
provided that, without the consent of the Company, Purchaser may not waive the
Minimum Tender Condition or the condition set forth in paragraph (b)(viii) of
Annex B) and to the other provisions of this Agreement. The initial expiration
date of the Offer shall be the 20th Business Day following the commencement of
the Offer (determined using Rule 14d-1(c)(6) under the Exchange Act). Purchaser
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Purchaser shall not (i) reduce the number of
shares of Company Common Stock subject to the Offer, (ii) reduce the price per
share of Company Common Stock to be paid pursuant to the Offer, (iii) modify or
add to the conditions set forth in Annex B in any manner materially adverse to
the holders of shares of Company Common Stock, (iv) except as provided in the
next sentence, extend the Offer, (v) change the form of consideration payable in
the Offer or (vi) otherwise amend the Offer in any manner materially adverse to
the holders of shares of Company Common Stock. Notwithstanding the foregoing,
Purchaser may, without the consent of the Company, (i) extend the Offer, if at
the scheduled expiration date of the Offer any of the conditions to Purchaser's
obligation to purchase shares of Company Common Stock are not satisfied, until
such time as such conditions are satisfied or waived, (ii) extend the Offer for
a period of not more than 10 Business Days beyond the expiration date that would
otherwise be permitted under clause (i) of this sentence, if on the date of such
extension less than 90% of the Fully Diluted Shares have been validly tendered
and not properly withdrawn pursuant to the Offer, (iii) extend the Offer for any
period required by any Regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer and (iv) extend the Offer for any reason
for a period of not more than 10 Business Days beyond the latest expiration date
that would otherwise be permitted under clause (i), (ii) or (iii) of this
sentence. On the terms and subject to the conditions of the Offer and this
Agreement, Purchaser shall, and Parent shall cause Purchaser to, pay for all
shares of Company Common Stock validly tendered and not withdrawn pursuant to
the Offer that Purchaser becomes obligated to purchase pursuant to the Offer as
soon as practicable after the expiration of the Offer.
(b) Notwithstanding anything to the contrary contained in this Agreement,
Parent and Purchaser shall not be required to commence the Offer in any
jurisdiction other than the United States of America.
(c) On the date of the commencement of the Offer, Purchaser shall file
with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer ("Schedule 14D-1") which will contain an offer to purchase and form of the
related letter of transmittal (the Schedule 14D-1 and the documents included
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, collectively, the "Offer Documents"). Parent, Purchaser,
and the Company each agrees promptly to correct any information provided by it
for use in the Offer Documents if and to the extent that it shall have become
false or misleading in any material respect and Parent and
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Purchaser further agree to take all steps necessary to cause the Offer Documents
as so corrected to be filed with the SEC and be disseminated to holders of
shares of Company Common Stock, in each case, as and to the extent required by
applicable federal securities Laws. Parent and Purchaser agree to give the
Company and its counsel a reasonable opportunity to review and comment on the
Offer Documents prior to the filing of the Offer Documents with the SEC.
Purchaser agrees to provide the Company and its counsel in writing with any
comments Purchaser and its counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after the receipt thereof.
SECTION 2.2 Company Actions. The Company hereby consents to the Offer
and represents that its Board of Directors (at a meeting duly called and held)
has unanimously (a) determined that the Offer and the Merger are fair to the
stockholders of the Company and are in the best interests of the stockholders of
the Company, (b) approved this Agreement, the Offer, the Merger and the
Stockholders Agreement, including for purposes of Section 203 of the GCL, and
(c) resolved to recommend acceptance of the Offer and approval and adoption of
this Agreement and the Merger by the stockholders of the Company which approval
constitutes approval of each of the transactions contemplated by this Agreement
for purposes of the applicable provisions of the GCL. The Financial Advisor has
delivered to the Board of Directors of the Company its opinion that the
consideration to be received by the holders of shares of Company Common Stock in
the Offer and the Merger is fair to the holders of shares of Company Common
Stock from a financial point of view. The Company hereby agrees to file a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") containing such
recommendation with the SEC (and the information required by Section 14(f) of
the Exchange Act if Parent shall have furnished such information to the Company
in a timely manner) and to mail such Schedule 14D-9 to the stockholders of the
Company; provided, that such recommendation may be withdrawn, modified or
amended by the Company's Board of Directors only to the extent permitted by
Section 7.3(b). Such Schedule 14D-9 shall be filed on the same date as
Purchaser's Schedule 14D-1 is filed and mailed together with the Offer
Documents. Each of the Company, Parent, and Purchaser agrees promptly to correct
any information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any material respect,
and the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and disseminated to the holders
of shares of Company Common Stock, in each case, as and to the extent required
by applicable federal securities Laws. The Company agrees to give Purchaser and
its counsel a reasonable opportunity to review and comment on the Schedule 14D-9
prior to the Company's filing of the Schedule 14D-9 with the SEC. The Company
agrees to provide Purchaser and its counsel in writing with any comments the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt thereof.
SECTION 2.3 Stockholder Lists. In connection with the Offer, the Company
will promptly furnish Purchaser with mailing labels, security position listings
and any available listing or computer file containing the names and addresses of
the record holders of shares of Company Common Stock as of a recent date and of
those Persons becoming record holders subsequent to such date (to the extent
available), together with all other information in the Company's possession or
control regarding the beneficial owners of shares of Company Common Stock and
shall furnish Purchaser with such information and assistance (including, to the
extent available, updated lists of stockholders, security position listings and
computer files) as Purchaser or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of shares of
Company Common Stock.
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SECTION 2.4 Composition of the Board of Directors; Section 14(f).
Promptly upon the acceptance for payment of, and payment by Purchaser for,
any shares of Company Common Stock pursuant to the Offer, Purchaser shall be
entitled to designate such number of directors on the Board of Directors of the
Company as will give Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors of the Company equal to
at least that number of directors, rounded up to the next whole number, which is
the product of (a) the total number of directors on the Company's Board of
Directors (giving effect to the directors elected pursuant to this sentence)
multiplied by (b) the percentage that (i) such number of shares of Company
Common Stock so accepted for payment and paid for by Purchaser plus the number
of shares of Company Common Stock otherwise owned by Purchaser or any other
Subsidiary of Parent bears to (ii) the number of such shares outstanding, and
the Company shall, at such time, cause Purchaser's designees to be so elected;
provided, however, that in the event that Purchaser's designees are appointed or
elected to the Board of Directors of the Company, until the Effective Time the
Board of the Directors of the Company shall have at least three directors who
are directors on the date of this Agreement (the "Independent Directors"); and
provided further that, in such event, if the number of Independent Directors
shall be reduced below three for any reason whatsoever, any remaining
Independent Directors (or Independent Director, if there shall be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Directors then remain, the other directors promptly shall
designate three persons to fill such vacancies who shall not be officers,
stockholders or Affiliates of Parent or Purchaser, and such persons shall be
deemed to be Independent Directors for purposes of this Agreement. Subject to
applicable Law, the Company shall take all action requested by Parent necessary
to effect any such election, including mailing to its stockholders the
information statement required under Rule 14f-1 containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company shall make such mailing with the mailing of the
Schedule 14D-9 (provided that Purchaser shall have provided to the Company on a
timely basis all information required to be included in the information
statement required under Rule 14f-1 with respect to Purchaser's designees).
Purchaser's designees shall be divided between the classes of directors as
necessary to comply with the requirements of the Company's bylaws. In connection
with the foregoing, the Company shall promptly, at the option of Purchaser,
either increase the size of the Board of Directors of the Company or obtain the
resignation of such number of its current directors as is necessary to enable
Purchaser's designees to be elected or appointed to the Board of Directors of
the Company as provided above. The date on which Purchaser's designees
constitute a majority of the Company's Board of Directors is herein referred to
as the "Control Date."
ARTICLE III
THE MERGER
SECTION 3.1 The Merger. Subject to the terms and conditions and in
reliance upon the representations, warranties, covenants and agreements
contained herein, Purchaser shall merge with and into the Company at the
Effective Time (the "Merger"). The terms and conditions of the Merger and the
mode of carrying the same into effect shall be as set forth in this Agreement.
As a result of the Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the Surviving Corporation. At the
election of Parent, any direct or indirect wholly owned Subsidiary of Parent may
be substituted for Purchaser as a constituent corporation in the Merger;
provided that any such substitution could not reasonably be expected to
materially and
AGREEMENT AND PLAN OF MERGER
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adversely affect the ability of the parties to perform their obligations
hereunder, or materially delay the consummation of the Offer or the Merger. In
such event, the parties shall execute an appropriate amendment to this Agreement
in order to reflect the foregoing.
SECTION 3.2 Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, the GCL.
SECTION 3.3 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the GCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of Purchaser and the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Purchaser and the Company
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 3.4 Certificate of Incorporation; Bylaws. (a) The certificate of
incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be amended at the Effective Time so that Article IV, Section 1 of
such certificate of incorporation reads in its entirety as follows: "The total
number of shares of all classes of stock which the corporation shall have
authority to issue is 1,000 shares of Common Stock, par value $1.00 per share
("Common Stock")." and, as so amended, such certificate of incorporation shall
be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.
(b) The bylaws of Purchaser as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law; provided, however,
that the bylaws of Purchaser shall be amended prior to the Effective Time to the
extent necessary to comply with Purchaser's obligations under the first sentence
of Section 7.13(a).
SECTION 3.5 Directors and Officers. The directors of Purchaser
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation, in each case until the earlier of their resignation or
removal or until their respective successors are duly elected or appointed and
qualify.
SECTION 3.6 Stock Options and Warrants.
(a) Upon consummation of the Merger, all then outstanding Company Stock
Options and all Company Common Stock subject to a vesting requirement granted to
any Company employee or director ("Restricted Stock") shall be canceled in
exchange for a cash payment to the holder of a Company Stock Option or
Restricted Stock award equal to (i) in the case of Company Stock Options, A
times B, where A equals the difference between the Per Share Merger
Consideration and the per share exercise price of the holder's Company Stock
Option and B equals the number of shares of Company Common Stock subject to the
holder's Company Stock Option and (ii) in the case of Restricted Stock, the
number of shares of the holder's Restricted Stock times the Per Share Merger
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Consideration. All applicable Taxes shall be withheld from any proceeds payable
under this Section 3.6(a).
(b) Before the commencement of the Offer, the Company shall take all
actions (including obtaining any and all consents from employees or directors)
necessary to implement Section 3.6(a); provided, the Company may not provide
additional compensation, benefits or other payments to holders of Company Stock
Options or Restricted Stock as an inducement to consent to the provisions of
Section 3.6(a).
(c) Except as provided herein or as otherwise agreed to by the parties,
(i) the Company Option Plans shall terminate as of the Effective Time and the
provisions in any other plan, program or arrangement providing for the issuance
or grant by the Company or any of its Subsidiaries of any interest in respect of
the capital stock of the Company or any of its Subsidiaries shall be terminated
as of the Effective Time, and (ii) following the Effective Time no holder of
Company Stock Options or Restricted Stock or any participant in the Company
Option Plans or any other such plans, programs or arrangements shall have any
right thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any Subsidiary thereof.
(d) The Company shall take all actions necessary to comply with Section
5.1(1) of the Warrant Agreement, so that upon exercise of the Warrants at any
time on or after the Effective Time and payment of the exercise price, the
holder thereof shall be entitled to receive, and the Warrants shall thereafter
represent the right to receive, in lieu of Company Common Stock issuable upon
such exercise prior to the Effective Time, cash in an amount per share of such
Company Common Stock equal to the Per Share Merger Consideration.
SECTION 3.7 Stockholders' Meeting. (a) If the adoption of this Agreement
by the Company's stockholders is required by Law, the Company shall, at Parent's
request, as soon as practicable following the expiration of the Offer, prepare
and file with the SEC the Proxy Statement in preliminary form, and each of the
Company and Parent shall use its best efforts to respond as promptly as
practicable to any comments of the SEC or its staff with respect thereto. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement. If at any time prior to receipt of
the Company Stockholder Approval there shall occur any event that should be set
forth in an amendment or supplement to the Proxy Statement, the Company shall
promptly prepare and mail to its stockholders such an amendment or supplement.
The Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects. The Company shall use its best
efforts to cause the Proxy Statement to be mailed to the Company's stockholders
as promptly as practicable after filing with the SEC.
(b) If the adoption of this Agreement by the Company's stockholders is
required by Law, the Company shall, at Parent's request, as soon as practicable
following the expiration of the Offer, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Company Stockholders' Meeting") for
the purpose of seeking the Company Stockholder Approval. The Company shall,
through the Board of Directors of the Company, give the recommendation referred
to in Section 2.2. Without limiting the generality of the foregoing, the
Company agrees that its obligations pursuant to this Section 3.7(b) shall not be
affected by the commencement, public proposal, public disclosure or
communication to the Company of any Acquisition Proposal. Notwithstanding the
foregoing, if Purchaser or any other Subsidiary of Parent shall acquire at least
AGREEMENT AND PLAN OF MERGER
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90% of the outstanding shares of Company Common Stock, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a stockholders meeting in accordance with Section 253 of the GCL.
(c) Parent will provide the Company with the information concerning
Parent and Purchaser required to be included in the Proxy Statement and will
vote, or cause to be voted, all shares of Company Common Stock owned by it or
its Subsidiaries in favor of the adoption of this Agreement.
ARTICLE IV
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 4.1 Merger Consideration; Conversion and Cancelation of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of the Parent Companies, the Company or the holders of any of
the following securities:
(a) Subject to Section 4.3, each share of Company Common Stock (and the
related Company Right) issued and outstanding immediately prior to the Effective
Time (excluding any shares of Company Common Stock described in Section 4.1(c))
shall be converted into the right to receive $40.00 in cash, without interest
thereon (the "Per Share Merger Consideration").
(b) All shares of Company Common Stock converted pursuant to Section
4.1(a) shall cease to be outstanding and shall automatically be canceled and
retired, and each holder of a Certificate previously evidencing such shares of
Company Common Stock shall cease to have any rights as a stockholder of the
Company, except the right to receive the Per Share Merger Consideration for each
such share.
(c) All shares of Company Common Stock that are owned by the Company as
treasury stock and each share of Company Common Stock, if any, owned by Parent
or any direct or indirect wholly owned Subsidiary of Parent or of the Company
immediately prior to the Effective Time shall cease to be outstanding and shall
be automatically canceled and retired without conversion thereof, and no
consideration shall be delivered or deliverable in exchange therefor.
(d) Each share of common stock, par value $1.00 per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall continue to
be issued and outstanding as one fully paid and nonassessable shares of common
stock, par value $1.00 per share, of the Surviving Corporation.
SECTION 4.2 Exchange of Certificates.
(a) Exchange Fund. On the day of the Effective Time, the Parent shall
deposit, or cause to be deposited, with the Exchange Agent in the Exchange Fund,
for the payment of the Merger Consideration through the Exchange Agent upon
surrender of Certificates in accordance with Section 4.2(c), cash in an amount
sufficient to make the cash payments due under Section 4.1(a). The Exchange Fund
shall not be used for any other purpose except as specified in Section 4.2(d).
(b) Letter of Transmittal. As soon as reasonably practicable after the
Effective Time, Parent will cause the Exchange Agent to send a letter of
transmittal (which shall specify that delivery
AGREEMENT AND PLAN OF MERGER
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shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in a
form and have such other provisions as Parent may reasonably specify) to each
record holder of shares of Company Common Stock immediately prior to the
Effective Time, along with other appropriate materials for use in surrendering
Certificates to the Exchange Agent.
(c) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall distribute to each former holder of
shares of Company Common Stock, upon surrender to the Exchange Agent for
cancelation of one or more Certificates, the Merger Consideration. If the Merger
Consideration is to be paid to a Person other than the Person in whose name the
surrendered Certificate or Certificates are registered, it shall be a condition
of payment of the Merger Consideration that the surrendered Certificate or
Certificates shall be properly endorsed, with signatures guaranteed, or
otherwise in proper form for transfer and that the Person requesting such
payment shall pay any transfer or other Taxes required by reason of the payment
of the Merger Consideration to a Person other than the registered holder of the
surrendered Certificate or Certificates or such Person shall establish to the
satisfaction of Parent that such Tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 4.2(c), each Certificate shall be
deemed from and after the Effective Time to represent only the right to receive
upon such surrender the Per Share Merger Consideration for each share of Company
Common Stock evidenced by such Certificate. In no event shall the holder of any
such surrendered Certificate be entitled to receive interest on any cash to be
received in the Merger. Neither the Exchange Agent nor any party hereto shall be
liable to a holder of shares of Company Common Stock for any amount paid to a
public official or Governmental Authority pursuant to any applicable abandoned
property, escheat, or similar Law. If any Certificate has not been surrendered
prior to the date which is five years after the Effective Time (or immediately
prior to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Authority), any such cash in respect of such Certificate shall, to
the extent permitted by applicable Law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any Person previously
entitled thereto.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains unclaimed by the former holders of shares of Company Common Stock for
six months after the Effective Time shall be delivered to Parent, upon demand,
and any former holders of shares of Company Common Stock who have not
theretofore complied with this Article IV shall thereafter look only to Parent
for any cash payment to which they are entitled.
(e) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(f) Withholding of Tax. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
former holder of shares of Company Common Stock such amounts as Parent (or any
Affiliate thereof) is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign Tax
Law. To the extent that amounts are so withheld by Parent and paid by Parent to
the applicable taxing authority, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the former holder of shares of
Company Common Stock in respect of which such deduction and withholding was made
by Parent.
AGREEMENT AND PLAN OF MERGER
-8-
SECTION 4.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock ("Dissenting Shares")
which are issued and outstanding immediately prior to the Effective Time and
that are held by any Person who is entitled to demand and properly demands
appraisal of such Dissenting Shares pursuant to, and who complies in all
respects with, Section 262 of the GCL ("Section 262") shall not be converted as
provided in Section 4.1(a), but rather the holders of Dissenting Shares shall be
entitled only to payment of the fair value of such Dissenting Shares in
accordance with Section 262; provided, however, that if any such holder shall
fail to perfect or otherwise shall waive, withdraw or lose the right to
appraisal under Section 262, then the right of such holder to be paid the fair
value of such holder's Dissenting Shares shall cease and such Dissenting Shares
shall be treated as if they had been converted as of the Effective Time into the
Merger Consideration as provided in Section 4.1(a). The Company shall serve
prompt notice to Parent of any demands received by the Company for appraisal of
any shares of Company Common Stock, and Parent shall have the right to
participate in and direct all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
SECTION 4.4 Closing. The closing (the "Closing") of the Merger shall
take place at the offices of Cravath, Swaine & Xxxxx, at 000 Xxxxxx Xxxxxx, Xxx
Xxxx, XX at 10 a.m. on a date as soon as practicable following the date on which
the conditions to the Closing (other than those that, by their terms, are to be
satisfied at the Closing) have been satisfied or waived, or at such other place,
time and date as the parties hereto may agree. At the conclusion of the Closing
on the Closing Date, the parties hereto shall cause the Certificate of Merger to
be filed with the Secretary of State of the State of Delaware.
SECTION 4.5 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent Companies that:
SECTION 5.1 Organization and Qualification; Subsidiaries. The Company
and each Subsidiary of the Company are legal entities duly organized, validly
existing and in good standing under the Laws of their respective jurisdictions
of incorporation or organization, have all requisite power and authority and
possess all governmental franchises and Permits necessary to enable them to own,
lease and operate their respective properties and assets and to carry on their
business as it is now being conducted and are duly qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted by them or the ownership or leasing of their respective properties and
assets makes such qualification necessary, other than such franchises and
Permits and qualifications the lack of which, individually or in the aggregate,
has not had and could not reasonably be expected to have a Material Adverse
Effect on the Company. Section 5.1 of the Company's Disclosure Letter sets
forth, as of the date of this Agreement, a true and complete list of all the
Company's directly or indirectly owned Subsidiaries, together with the
jurisdiction of incorporation of each Subsidiary and the percentage of each
Subsidiary's outstanding capital stock or other equity interests owned of record
or beneficially by the Company or another Subsidiary of
AGREEMENT AND PLAN OF MERGER
-9-
the Company. Except for such Subsidiaries and as disclosed in Section 5.1 of the
Company's Disclosure Letter, neither the Company nor any of its Subsidiaries
owns an equity interest in any partnership or joint venture arrangement or other
business entity.
SECTION 5.2 Certificate of Incorporation and Bylaws. The Company has
heretofore furnished or made available to Parent complete and correct copies of
the certificate of incorporation and the bylaws or the equivalent organizational
documents, in each case as amended or restated to the date hereof, of the
Company and each of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is in violation of any of the provisions of its certificate of
incorporation or bylaws (or equivalent organizational documents).
SECTION 5.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i) 53,000,000
shares of Company Common Stock of which, as of April 6, 1998, 25,206,204 shares
were issued and outstanding, all of which are duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights, and (ii)
1,000,000 shares of preferred stock, par value $0.01 per share, of which none is
issued but of which 500,000 shares have been designated as Series A Junior
Participating Preferred Stock in connection with the rights (the "Company
Rights") issued pursuant to the Company's Rights Agreement. As of April 6, 1998,
there were 2,452,016 shares of Company Common Stock reserved for future issuance
pursuant to outstanding Company Stock Options granted pursuant to the Company
Option Plans and 975,195 shares of Company Common Stock reserved for future
issuance pursuant to outstanding Warrants. Except as set forth in Section 5.3(a)
of the Company's Disclosure Letter, between April 6, 1998 and the date of this
Agreement, no shares of Company Common Stock have been issued by the Company.
Except as set forth in Section 5.3(a) of the Company's Disclosure Letter, since
April 6, 1998, the Company has not granted any options for, or other rights to
purchase, shares of Company Common Stock.
(b) Except as set forth in Section 5.3(a), no shares of Company Common
Stock are reserved for issuance, and, except for the Warrants, the Company
Rights, Company Stock Options, and Restricted Stock, as listed in Section 5.3(b)
of the Company's Disclosure Letter, there are no options, warrants, rights,
convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, contracts, agreements,
commitments or arrangements obligating the Company (i) to offer, sell, issue or
grant any shares of, or any options, warrants or rights of any kind to acquire
any shares of, or any securities that are convertible into or exchangeable for
any shares of, capital stock of the Company, (ii) to redeem, purchase or
acquire, or offer to purchase or acquire, any outstanding shares of, or any
outstanding options, warrants or rights of any kind to acquire any shares of, or
any outstanding securities that are convertible into or exchangeable for any
shares of, capital stock of the Company or (iii) to grant any Lien on any shares
of capital stock of the Company.
(c) The authorized, issued and outstanding capital stock of, or other
equity interests in, each of the Company's Subsidiaries and the names and
addresses of the holders of record of the capital stock or other equity
interests of each such Subsidiary are set forth in Section 5.3(c) of the
Company's Disclosure Letter. Except as set forth in Section 5.3(c) of the
Company's Disclosure Letter, (i) the issued and outstanding shares of capital
stock of, or other equity interests in, each of the Subsidiaries of the Company
that are owned by the Company or any of its Subsidiaries have been duly
authorized and are validly issued, and, with respect to capital stock, are fully
paid and nonassessable, and were not issued in violation of any preemptive or
similar rights of any past or present equity holder of such Subsidiary; (ii) all
such issued and outstanding shares, or other equity
AGREEMENT AND PLAN OF MERGER
-10-
interests, that are indicated as owned by the Company or one of its Subsidiaries
in Section 5.3(c) of the Company's Disclosure Letter are owned (A) beneficially
as set forth therein and (B) free and clear of all Liens except as described
therein; (iii) no shares of capital stock of, or other equity interests in, any
Subsidiary of the Company are reserved for issuance, and there are no options,
warrants, rights, convertible or exchangeable securities, "phantom" stock
rights, stock appreciation rights, stock-based performance units, contracts,
agreements, commitments or arrangements obligating the Company or any of its
Subsidiaries (A) to offer, sell, issue, grant, pledge, dispose of or encumber
any shares of capital stock of, or other equity interests in, or any options,
warrants or rights of any kind to acquire any shares of capital stock of, or
other equity interests in, or any securities that are convertible into or
exchangeable for any shares of capital stock of, or other equity interests in,
any of the Subsidiaries of the Company or (B) to redeem, purchase or acquire, or
offer to purchase or acquire, any outstanding shares of capital stock of, or
other equity interests in, or any outstanding options, warrants or rights of any
kind to acquire any shares of capital stock of, other equity interests in, or
any outstanding securities that are convertible into or exchangeable for, any
shares of capital stock of, or other equity interests in, any of the
Subsidiaries of the Company or (C) to grant any Lien on any outstanding shares
of capital stock of, or other equity interests in, any of the Subsidiaries of
the Company.
(d) Except as set forth in Section 5.3(d) of the Company's Disclosure
Letter, the Company's Rights Agreement, and the Company Option Plans listed in
Section 5.3(b) of the Company's Disclosure Letter, there are no voting trusts,
proxies or other agreements, commitments or understandings of any character to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound with respect to the voting of any shares of
capital stock of the Company or any of its Subsidiaries or with respect to the
registration of the offering, sale or delivery of any shares of capital stock of
the Company or any of its Subsidiaries under the Securities Act. The Company
has delivered to Parent a complete and correct copy of the Company's Rights
Agreement, as amended to the date of this Agreement.
(e) There are not any bonds, debentures, notes or other Indebtedness
of the Company having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which stockholders
of the Company may vote ("Voting Company Debt").
SECTION 5.4 Authorization of Agreement. (a) The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and each instrument required hereby to be executed and delivered by it prior to
or at the Closing, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Company of this Agreement and each instrument required hereby to
be executed and delivered by it prior to or at the Closing and the performance
of its obligations hereunder and thereunder have been duly and validly
authorized by all requisite corporate action on the part of the Company (other
than, with respect to the Merger, the adoption of this Agreement by the holders
of a majority of the outstanding shares of Company Common Stock in accordance
with the GCL). This Agreement has been duly executed and delivered by the
Company and (assuming due authorization, execution and delivery hereof by the
other parties hereto) constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
the same may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar Laws relating to creditors'
rights generally, and (ii) legal principles of general applicability governing
the application and availability of equitable remedies..
(b) The only vote of holders of any class or series of capital stock of
the Company necessary to adopt or approve this Agreement and the Merger is the
adoption of this Agreement by the holders
AGREEMENT AND PLAN OF MERGER
-11-
of a majority of the outstanding shares of Company Common Stock (the "Company
Stockholder Approval"). The affirmative vote of the holders of any capital stock
of the Company, or any of them, is not necessary to consummate the Offer or any
transaction contemplated by this Agreement other than the Merger.
SECTION 5.5 Approvals. Except for the applicable requirements, if
any, of (a) the Exchange Act, (b) state securities Laws or blue sky Laws, (c)
the XXX Xxx, (x) Xxxx-Xxxxxx, (x) xxx XXXX, (x) the filing and recordation of
appropriate merger documents as required by the GCL, (g) the National Industrial
Security Program Operating Manual with respect to foreign ownership, control or
influence and (h) those Laws and Orders noncompliance with which could not
reasonably be expected to have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement or to have a Material
Adverse Effect on the Company, no filing or registration with, no waiting period
imposed by and no Permit or Order of, any Governmental Authority is required
under any Law or Order applicable to the Company or any of its Subsidiaries to
permit the Company to execute, deliver or perform this Agreement or any
instrument required hereby to be executed and delivered by it prior to or at the
Closing.
SECTION 5.6 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 5.5 and adoption of this Agreement by the
stockholders of the Company as required by the GCL and except as set forth in
Section 5.6 of the Company's Disclosure Letter, neither the execution and
delivery by the Company of this Agreement or any instrument required hereby to
be executed and delivered by it prior to or at the Closing nor the performance
by the Company of its obligations hereunder or thereunder will (a) conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancelation or
acceleration of any obligation or to loss of a Material benefit under, or to
increased, additional, accelerated or guaranteed rights or entitlements of any
Person under, or result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary of the Company under, any provision
of (i) any Law or Order applicable to the Company, (ii) the certificate of
incorporation or bylaws of the Company or (iii) any contract or agreement to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties or assets is
bound, or (b) with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
that could not reasonably be expected to have a Material Adverse Effect on the
Company. Prior to the execution of this Agreement, the Board of Directors of
the Company has taken all necessary action to cause this Agreement, the
Stockholders Agreement and the transactions contemplated or permitted hereby and
thereby to be exempt from the provisions of Section 203 of the GCL and to cause
any Company Rights not to be distributed or exercisable under the Company's
Rights Agreement. To the Company's Knowledge, no other state takeover statute
or similar Law or Regulation applies or purports to apply to the Company with
respect to this Agreement, the Stockholders Agreement, the Offer, the Merger or
any other transaction contemplated by this Agreement or the Stockholders
Agreement. The Company has been advised by each of its directors and executive
officers that each such Person currently intends to tender all shares of Company
Common Stock owned by such Person pursuant to the Offer, except to the extent of
any restrictions created by Section 16(b) of the Exchange Act.
AGREEMENT AND PLAN OF MERGER
-12-
SECTION 5.7 Reports and Financial Statements.
(a) The Company has filed all SEC Reports required to be filed by the
Company with the SEC since January 1, 1997 (the "Company SEC Documents"). As of
its respective date, each Company SEC Document complied in all material respects
with the requirements of the Exchange Act or the Securities Act, as the case may
be, applicable to such Company SEC Document, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent that information contained in any Company SEC Document has been revised
or superseded by a later filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No Subsidiaries of the Company are SEC reporting companies.
(b) Since December 31, 1997, the Company and its Subsidiaries have filed
all Reports required to be filed with any Governmental Authorities other than
the SEC, including state securities administrators, except where the failure to
file any such Reports of the Company would not reasonably be expected to have a
Material Adverse Effect on the Company. Such Reports of the Company, including
all those filed after the date of this Agreement and prior to the Effective
Time, were prepared in all material respects in accordance with the requirements
of applicable Law.
(c) The Company Consolidated Financial Statements and any consolidated
financial statements of the Company (including any related notes thereto)
contained in any SEC Reports of the Company filed with the SEC (i) have been or
will have been prepared in accordance with applicable accounting requirements
and the published Regulations of the SEC and in accordance with GAAP
consistently applied (except (A) to the extent required by changes in GAAP and
(B) with respect to SEC Reports of the Company filed prior to the date of this
Agreement, as may be indicated in the notes thereto) and (ii) fairly present the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the respective dates thereof and the consolidated results of their
operations and cash flows for the periods indicated (and include, in the case of
any unaudited interim financial statements, reasonable accruals for normal year-
end adjustments).
SECTION 5.8 No Undisclosed Liabilities. Except as set forth in Section
5.8 of the Company's Disclosure Letter, there exist no liabilities or
obligations of the Company and its Subsidiaries that are Material to the
Company, whether accrued, absolute, contingent or otherwise, which would be
required to be reflected, reserved for or disclosed under GAAP in consolidated
financial statements of the Company (including the notes thereto) as of and for
the period ended on the date this representation and warranty is given or
required to be true to satisfy any condition to the Offer or the Merger, other
than (a) liabilities or obligations that are adequately reflected, reserved for
or disclosed in the Company's Consolidated Financial Statements and, (b)
liabilities or obligations incurred in the ordinary course of business of the
Company since the Balance Sheet Date not in violation of this Agreement. Except
as set forth in Section 5.8 of the Company's Disclosure Letter, neither the
Company nor any of its Subsidiaries has any liability for any discontinued
operations (as such term is used in accordance with GAAP) or with respect to any
business, properties or assets formerly owned or operated by the Company or any
of its Subsidiaries or with respect to any acquiree or predecessor of the
Company or any of its Subsidiaries, that would individually or in the aggregate
have a Material Adverse Effect on the Company.
AGREEMENT AND PLAN OF MERGER
-13-
SECTION 5.9 No Material Adverse Effect; Conduct.
Except as disclosed in the Company SEC Documents filed and publicly
available prior to the date of this Agreement (the "Filed Company SEC
Documents") or in Section 5.9 of the Company Disclosure Letter, from the date of
the most recent audited financial statements included in the Filed Company SEC
Documents, the Company has conducted its business only in the ordinary course,
and during such period there has not been:
(a) any event, change, effect or development that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect on the Company;
(b) any declaration, setting aside or payment of any dividend on, or other
distribution in respect of (whether in cash, stock or property), any capital
stock of the Company or any repurchase for value by the Company of any capital
stock of the Company;
(c) any split, combination or reclassification of any capital stock of
the Company or of any other equity interests in the Company, or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of capital stock of the Company or of any other
equity interests in the Company;
(d) (i) any granting by the Company or any Subsidiary of the Company to
any director or executive officer of the Company or any Subsidiary of the
Company of any increase in compensa tion, except in the ordinary course of
business consistent with past practice or as was required under employment
agreements in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents, (ii) any granting by the
Company or any Subsidiary of the Company to any such director or executive
officer of any increase in severance or termination pay, except as was required
under any employment, severance or termination agreements in effect as of the
date of the most recent audited financial statements included in the Filed
Company SEC Documents, or (iii) any entry by the Company or any Subsidiary of
the Company into any employment, severance or termination agreement with any
such director or executive officer; or
(e) any change in accounting methods, principles or practices by the
Company or any Subsidiary of the Company 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.
SECTION 5.10 Schedule 14D-9; Offer Documents; Proxy Statement. None of
the information (other than information provided in writing by Parent or
Purchaser for inclusion therein) supplied or to be supplied for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Proxy Statement, including any amendments or supplements thereto, at the time
such document is filed with the SEC, at any time it is amended or supplemented
or at the time it is first published or sent or given to holders of shares of
Company Common Stock, and, in the case of the Proxy Statement, at the time that
it or any amendment or supplement thereto is mailed to the Company's
stockholders, at the time of the Company Stockholders' Meeting or at the
Effective Time, will 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 for information supplied by Parent or Purchaser in
writing for inclusion therein, the Schedule 14D-9 and the Proxy Statement,
including any amendments or supplements thereto, will comply in all material
respects with the Exchange Act.
AGREEMENT AND PLAN OF MERGER
-14-
SECTION 5.11 Properties and Assets. Except as set forth in Section 5.11
of the Company's Disclosure Letter, the Company and its Subsidiaries own or have
rights to use all properties and assets necessary to permit the Company and its
Subsidiaries to continue to conduct their businesses as currently being
conducted except where the failure to own or have the right to use such
properties and assets would not, individually or in the aggregate, have a
Material Adverse Effect on the Company. Except as set forth in Section 5.11 of
the Company Disclosure Letter, each of the Company and its Subsidiaries has good
and indefeasible fee title to, or valid leasehold interests in, all its material
real property, free and clear of all Liens except for Permitted Encumbrances.
SECTION 5.12 Material Contracts. Section 5.12 of the Company's Disclosure
Letter contains a true and complete list of the Material Contracts of the
Company and its Subsidiaries. Except as set forth in Section 5.12 of the
Company's Disclosure Letter, neither the Company nor any of its Subsidiaries is
a party to or bound by any Material Contract. All Material Contracts to which
the Company or any of its Subsidiaries is a party are in full force and effect,
the Company or the Subsidiary of the Company that is a party to or bound by such
Material Contract has performed its obligations thereunder to date and, to the
Knowledge of the Company, each other party thereto has performed its obligations
thereunder to date, other than any failure of a Material Contract to be in full
force and effect or any nonperformance thereof that could not reasonably be
expected to have a Material Adverse Effect on the Company. As of the date of
this Agreement, except where the same would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, to the Company's
Knowledge, neither the Company nor any of its Subsidiaries (a) has received any
written notice of the intention of any party to terminate any Material Contract,
whether as a termination for convenience or for default of the Company or any
Subsidiary thereunder, or (b) has any pending default termination action or open
written cure notice or show cause notice (as defined in the Federal Acquisition
Regulations Part 49, (P) 49.607(a) and (b), respectively) in respect of any such
Material Contract which is a Government Contract. To the Company's Knowledge, as
of the date hereof, there is no pending written claim or request for equitable
adjustment under any Government Contract by any Governmental Authority that
would have a Material Adverse Effect on the Company. To the Company's Knowledge,
the Company and its Subsidiaries are in compliance in all material respects with
all of their obligations relating to any equipment or fixtures owned by any
Governmental Authority and loaned, bailed or otherwise furnished to or held by
the Company or any of its Subsidiaries except where the failure to so comply
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
SECTION 5.13 Litigation; Compliance with Laws. There are no actions,
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits or proceedings that (a) are set
forth in Section 5.13 of the Company's Disclosure Letter, or (b) individually
or, with respect to multiple actions, suits or proceedings that allege similar
theories of recovery based on similar facts, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company. Except
as set forth in Section 5.13 of the Company's Disclosure Letter, the Company and
its Subsidiaries are in compliance with all applicable Laws and Regulations
(including the Truth-In-Negotiations-Act, the Procurement Integrity Act, the
Foreign Corrupt Practices Act, the Cost Accounting Standards, the Regulations of
applicable Governmental Entities governing foreign military sales, export
controls, illegal boycotts, national security and any other Laws or Orders
incorporated expressly, by reference or by operation of Law into, or otherwise
applicable to, any contract or other agreement made with the United States of
America (a "Government Contract")) and are not in default with respect to any
Order applicable to the Company or any of its Subsidiaries, except such events
of noncompliance or defaults that, individually or in
AGREEMENT AND PLAN OF MERGER
-15-
the aggregate, have not and could not reasonably be expected to have a Material
Adverse Effect on the Company. Since January 1, 1993, to the date hereof,
neither the Company nor any Subsidiary of the Company has received any written
notice of any administrative or civil or criminal investigation or audit (other
than Tax audits) by any Governmental Authority (including any qui tam action
brought under the Civil False Claims Act alleging any irregularity, misstatement
or omission arising under or relating to any Government Contract) relating to
the Company or any of its Subsidiaries that, individually or in the aggregate,
would have a Material Adverse Effect on the Company. Notwithstanding the
foregoing, except as set forth in Section 5.13 of the Company's Disclosure
Letter, since January 1, 1993, to the Knowledge of the Company, neither the
Company nor any Subsidiary of the Company nor any officer or director of the
Company or any Subsidiary of the Company is or has been the subject of any
criminal investigation in respect of any Government Contract.
SECTION 5.14 Employee Benefit Plans.
(a) Each Benefit Plan of the Company and its Subsidiaries is listed in
Section 5.14 of the Company's Disclosure Letter, including, with respect to
Terminated Benefit Plans, the date of termination.
(b) No event has occurred and, to the Knowledge of the Company, there
exists no condition or set of circumstances in connection with which the Company
or any of its Subsidiaries could be subject to any liability under the terms of
any Benefit Plan, or under ERISA, or, with respect to any Benefit Plan, under
the Code or any other applicable Law, other than any condition or set of
circumstances that could not reasonably be expected to have a Material Adverse
Effect on the Company. Each of the Benefit Plans has been administered in
material compliance with its terms and with the applicable provisions of ERISA,
the Code and any other applicable Law.
(c) As to any Benefit Plan of the Company intended to be qualified under
Section 401 of the Code, such Benefit Plan has been determined by the IRS to
satisfy in form the requirements of such Section, no event has occurred that
could be reasonably expected to result in the disqualification of such Benefit
Plan and there has been no termination or partial termination of such Benefit
Plan within the meaning of Section 411(d)(3) of the Code.
(d) As to any Terminated Benefit Plan intended to have been qualified
under Section 401 of the Code, such Terminated Benefit Plan received a favorable
determination letter from the IRS with respect to its termination.
(e) There are no investigations, audits, actions, suits or claims pending
(other than routine claims for benefits) or, to the Knowledge of the Company,
threatened against, or with respect to, any Benefit Plan or its assets that
could reasonably be expected to have a Material Adverse Effect on the Company.
(f) To the Knowledge of the Company, there is no matter pending (other
than routine qualification determination filings) with respect to any Benefit
Plan before the IRS, the Department of Labor or the PBGC.
(g) All contributions required to be made by the Company or the Company's
Subsidiaries to any Benefit Plan pursuant to its terms and provisions have been
timely made.
AGREEMENT AND PLAN OF MERGER
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(h) As to any Current Benefit Plan subject to Title IV of ERISA, (i) there
has been no event or condition which presents a material risk of plan
termination, (ii) no accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412 of the Code has been
incurred within six years prior to date of this Agreement, (iii) no reportable
event within the meaning of Section 4043 of ERISA (for which the disclosure
requirements of Regulation section 2615.3 promulgated by the PBGC have not been
waived) has occurred within six years prior to the date of this Agreement, (iv)
no notice of intent to terminate such Benefit Plan has been given under Section
4041 of ERISA, (v) no proceeding has been instituted under Section 4042 of ERISA
to terminate such Benefit Plan, (vi) no liability to the PBGC has been incurred
(other than with respect to required premium payments) and (vii) the assets of
the Benefit Plan equal or exceed the actuarial present value of the benefit
liabilities, within the meaning of Section 4041 of ERISA, under such Benefit
Plan, based upon reasonable actuarial assumptions and the asset valuation
principles established by the PBGC.
(i) Except as set forth in Section 5.14 of the Company's Disclosure
Letter, in connection with the consummation of the transactions contemplated by
this Agreement, no payments have been or will be made under any Current Benefit
Plan or any other program, agreement, policy or arrangement which would be
nondeductible under Section 280G of the Code.
(j) Except as set forth in Section 5.14 of the Company's Disclosure
Letter, the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not (i) require the Company or any of its
Subsidiaries to pay greater compensation or make a larger contribution to, or
pay greater benefits or accelerate payment or vesting of a benefit under, any
Current Benefit Plan or any other program, agreement, policy or arrangement or
(ii) create or give rise to any additional vested rights or service credits
under any Current Benefit Plan or any other program, agreement, policy or
arrangement.
(k) Except as set forth in Section 5.14 of the Company's Disclosure
Letter, neither the Company nor any of its Subsidiaries is a party to or is
bound by any severance agreement, program or policy. True and correct copies of
all employment agreements with officers of the Company and its Subsidiaries, and
all vacation, overtime and other compensation policies of the Company and its
Subsidiaries relating to their employees have been made available to Parent.
(l) Except as set forth in Section 5.14 of the Company's Disclosure
Letter, no Benefit Plan provides retiree medical or retiree life insurance
benefits to any Person and neither the Company nor any of its Subsidiaries is
contractually or otherwise obligated (whether or not in writing) to provide any
Person with life insurance or medical benefits upon retirement or termination of
employment, other than as required by the provisions of Sections 601 through 608
of ERISA and Section 4980B of the Code.
(m) Neither the Company nor any of its Subsidiaries contributes or has
an obligation to contribute, and neither has within six years prior to the date
of this Agreement contributed or had an obligation to contribute, to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(n) Except as disclosed in Section 5.14 of the Company's Disclosure
Letter, no compensation payable by the Company or any of its Subsidiaries to any
of their employees under any Current Benefit Plan or other program, agreement,
policy or arrangement is subject to disallowance under Section 162(m) of the
Code.
AGREEMENT AND PLAN OF MERGER
-17-
SECTION 5.15 Labor Matters. Except as set forth in Section 5.15 of
the Company's Disclosure Letter, no collective bargaining agreement to which the
Company or any of its Subsidiaries is a party is currently in effect or is being
negotiated by the Company or any of its Subsidiaries. There is no pending or,
to the Knowledge of the Company, threatened labor dispute, strike or work
stoppage against the Company or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect on the Company. To the Knowledge of
the Company, neither the Company or any of its Subsidiaries nor any
representative or employee of the Company or any of its Subsidiaries has
committed any unfair labor practices in connection with the operation of the
business of the Company and its Subsidiaries, and there is no pending or, to the
Knowledge of the Company, threatened charge or complaint against the Company or
any of its Subsidiaries by the National Labor Relations Board or any comparable
agency of any state of the United States. The Company and its Subsidiaries are
in material compliance with all applicable federal, state, local or foreign
labor Laws.
SECTION 5.16 Taxes.
(a) (i) All Tax Returns that are required to be filed by or with
respect to the Company or any of its Subsidiaries on or before the Effective
Time have been or will be timely filed, and all such Tax Returns are or will be
true, complete and accurate, (ii) all Taxes that are due on or before the
Effective Time have been or will be timely paid in full, (iii) all withholding
Tax requirements imposed on or with respect to the Company or any of its
Subsidiaries have been or will be satisfied in full in all respects, (iv) no
penalty, interest or other charge is or will become due with respect to the late
filing of any such Tax Return or late payment of any such Tax and (v) the most
recent financial statements contained in the Filed Company SEC Documents reflect
an adequate reserve for all Taxes of the Company and its Subsidiaries for all
taxable periods and portions thereof through the date of such financial
statements.
(b) Except as set forth in Section 5.16 of the Company's Disclosure
Letter, all income Tax Returns have been audited by the applicable Governmental
Authority or the applicable statute of limitations has expired for the period
covered by such Tax Returns.
(c) Except as set forth in Section 5.16 of the Company's Disclosure
Letter, there is not in force any extension of time with respect to the due date
for the filing of any Tax Return or any waiver or agreement for any extension of
time for the assessment or payment of any Tax due with respect to the period
covered by any Tax Return.
(d) Except as disclosed in Section 5.16 of the Company's Disclosure
Letter, there is no claim against the Company or any of its Subsidiaries for any
Taxes, and no assessment, deficiency or adjustment has been asserted or proposed
with respect to any Tax Return.
(e) Except as set forth in Section 5.16 of the Company's Disclosure
Letter, since January 1, 1988, none of the Company and its Subsidiaries, has
been a member of an Affiliated group filing a consolidated federal income Tax
Return other than the affiliated group of which the Company is the common parent
corporation.
(f) There are no material Liens for Taxes on the assets of the Company or
any of its Subsidiaries.
(g) Except as set forth in Section 5.16 of the Company's Disclosure
Letter, neither the Company nor any of its Subsidiaries is bound by any
agreement with respect to Taxes.
AGREEMENT AND PLAN OF MERGER
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(h) Except as set forth in Section 5.16 of the Company's Disclosure
Letter or as disclosed in the most recent audited financial statements included
in the Filed Company SEC Documents, neither the Company nor any of its
Subsidiaries will be required to include in a taxable period beginning after the
Effective Date taxable income attributable to income that economically accrued
in a taxable period ending on or before the Effective Date, including as a
result of the installment method of accounting, the completed contract or
percentage of completion methods of accounting (including the look-back method
under Section 460(b)(2) of the Code) or the cash method of accounting.
(i) Except as set forth in Section 5.16 of the Company's Disclosure
Letter, neither the Company nor any of its Subsidiaries will be required in a
taxable period beginning on or after the Effective Date to include any amount in
income pursuant to Section 481 of the Code (or any comparable provisions of
state, local or foreign Law), by reason of a change in accounting methods or
otherwise, as a result of actions taken prior to the Effective Date.
SECTION 5.17 Environmental Matters. Except for matters disclosed in
Section 5.17 of the Company's Disclosure Letter or as described in Reports,
copies of which have been provided to Parent, and except for matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Company, (a) the properties, operations and
activities of the Company and its Subsidiaries are in compliance with all
Environmental Laws; (b) the Company and its Subsidiaries and the properties,
operations and activities of the Company and its Subsidiaries are not subject to
any existing, pending or, to the Knowledge of the Company, threatened action,
suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits or
applications therefor required to be obtained or filed by the Company or any of
its Subsidiaries under any Environmental Law in connection with the properties,
operations and activities of the Company and its Subsidiaries have been obtained
or filed and are valid and currently in full force and effect, and, to the
Company's Knowledge, there are no facts or circumstances that would cause such
Permits to be revoked, modified or not renewed under current conditions or in
connection with the transactions contemplated by this Agreement; (d) there has
been no release of any hazardous substance, pollutant or contaminant into the
environment by the Company or its Subsidiaries or in connection with their
properties, operations or activities; (e) there has been no exposure
(attributable to the action of the Company or its Subsidiaries) of any Person or
property to any hazardous substance, pollutant or contaminant in connection with
the properties, operations and activities of the Company and its Subsidiaries;
and (f) neither the Company nor its Subsidiaries have assumed, whether by
contract, operation of Law or otherwise, any liabilities or obligations arising
under Environmental Laws in connection with their respective formerly owned
properties, businesses, divisions, Subsidiaries, companies or other entities.
SECTION 5.18 Intellectual Property. The Company and its Subsidiaries
own, or are validly licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service xxxx rights, copyrights, inventions, trade secrets, mask
works and other proprietary intellectual property rights and computer programs
(collectively, "Intellectual Property Rights") which are Material to the conduct
of the business of the Company and its Subsidiaries, taken as a whole. Section
5.18 of the Company's Disclosure Letter sets forth a description of all
Intellectual Property Rights which are Material to the conduct of the business
of the Company and its Subsidiaries taken as a whole. Except as set forth in
Section 5.18 of the Company's Disclosure Letter, no claims are pending or, to
the Knowledge of the Company, threatened that the Company or any of its
Subsidiaries is infringing or otherwise adversely affecting the rights of any
Person with regard to any Intellectual Property Right. To the Knowledge of the
AGREEMENT AND PLAN OF MERGER
-19-
Company, except as set forth in Section 5.18 of the Company's Disclosure Letter,
no Person is infringing the rights of the Company or any of its Subsidiaries
with respect to any Intellectual Property Right.
SECTION 5.19 Brokers. No broker, finder or investment banker (other than
the Financial Advisor) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The estimated fees
and expenses incurred and to be incurred by the Company in connec tion with the
Offer, the Merger and the other transactions contemplated by this Agreement
(including the fees of the Financial Adviser and the fees of the Company's legal
counsel) are set forth in Section 5.19 of the Company's Disclosure Letter. The
Company has furnished to Parent a true and complete copy of all agreements
between the Company and the Financial Advisor relating to the Merger and the
other transactions contemplated hereby.
SECTION 5.20 Opinion of Financial Advisor. The Company has received the
opinion of the Financial Advisor, dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair to the Company's stockholders
from a financial point of view, a signed copy of which opinion has been
delivered to Parent.
SECTION 5.21 Year 2000. With respect to the "Year 2000 Problem," the
information set forth under the caption "Year 2000" on page 24 of the 1997
Annual Report of the Company is accurate. The Company has no Material exposure
to contingencies related to the "Year 2000 Problem" for the products and
services it has sold or is currently selling.
SECTION 5.22 Insurance. The Company and its Subsidiaries maintain
policies of fire and casualty, liability and other forms of insurance in such
amounts, with such deductibles and against such risks and losses as are in the
Company's judgment, reasonable for the assets and properties of the Company and
its Subsidiaries and as are customary in the Company's industry. As of the date
of this Agreement, except as set forth in Section 5.22 of the Company's
Disclosure Letter, all such policies are in full force and effect, all premiums
due and payable thereon have been paid, and no notice of cancelation or
termination has been received with respect to any such policy.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES
The Parent Companies hereby represent and warrant to the Company that:
SECTION 6.1 Organization and Qualification; Subsidiaries. Parent and
Purchaser are legal entities duly organized, validly existing and in good
standing under the Laws of their respective jurisdictions of incorporation or
organization, have all requisite power and authority to own, lease and operate
their respective properties and assets and to carry on their business as it is
now being conducted and are duly qualified and in good standing to do business
in each jurisdiction in which the nature of the business conducted by them or
the ownership or leasing of their respective properties and assets makes such
qualification necessary, other than such qualifications the lack of which,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Material Adverse Effect on Parent.
AGREEMENT AND PLAN OF MERGER
-20-
SECTION 6.2 Authorization of Agreement. Each of Parent and Purchaser has
all requisite corporate power and authority to execute and deliver this
Agreement and each instrument required hereby to be executed and delivered by it
prior to or at the Closing, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby. The execution and
delivery by Parent and Purchaser of this Agreement and each instrument required
hereby to be executed and delivered by Parent or Purchaser prior to or at the
Closing and the performance of their respective obligations hereunder and
thereunder have been duly and validly authorized by all requisite corporate
action (including stockholder action) on the part of Parent and Purchaser,
respectively. This Agreement has been duly executed and delivered by Parent and
Purchaser and (assuming due authorization, execution and delivery hereof by the
other party hereto) constitutes a legal, valid and binding obligation of Parent
and Purchaser, enforceable against Parent and Purchaser in accordance with its
terms, except as the same may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar Laws relating
to creditors' rights generally and (b) legal principles of general applicability
governing the application and availability of equitable remedies.
SECTION 6.3 Approvals. Except for the applicable requirements, if any,
of (a) the Exchange Act, (b) state securities Laws or blue sky Laws, (c) the XXX
Xxx, (x) Xxxx-Xxxxxx, (x) xxx XXXX, (x) the filing and recordation of
appropriate merger documents as required by the GCL (and other state Laws where
Purchaser or the Company are qualified to do business), (g) the National
Industrial Security Program Operating Manual with respect to foreign ownership,
control or influence and (h) those Laws and Orders noncompliance with which
could not reasonably be expected to have a material adverse effect on the
ability of Parent or Purchaser to perform its obligations under this Agreement,
no filing or registration with, no waiting period imposed by and no Permit or
Order of, any Governmental Authority is required under any Law or Order
applicable to Parent or Purchaser to permit Parent or Purchaser to execute,
deliver or perform this Agreement or any instrument required hereby to be
executed and delivered by it prior to or at the Closing.
SECTION 6.4 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 6.3, neither the execution and delivery by
Parent or Purchaser of this Agreement or any instrument required hereby to be
executed and delivered by Parent or Purchaser prior to or at the Closing nor the
performance by Parent or Purchaser of their respective obligations hereunder or
thereunder will (a) conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancelation or acceleration of any obligation or to loss
of a Material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any Person under, or result in the creation
of any Lien upon any of the properties or assets of Parent or any Subsidiary of
Parent under, any provision of (i) any Law or Order applicable to Parent or
Purchaser, (ii) the certificate of incorporation or bylaws of Parent or
Purchaser or (iii) any contract or agreement to which Parent or any of its
Subsidiaries is a party or by which it or any of its properties or assets is
bound, or (b) with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
that could not reasonably be expected to have a material adverse effect upon the
ability of Parent or Purchaser to perform its obligations under this Agreement.
SECTION 6.5 Proxy Statement; Schedule 14D-9. None of the information
supplied or to be supplied by or on behalf of Parent or Purchaser for inclusion
or incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Proxy Statement, including any amendments or supplements thereto, at the time
such document is filed with the SEC, at any time it is amended or
AGREEMENT AND PLAN OF MERGER
-21-
supplemented or at the time it is first published or given to holders of shares
of Company Common Stock, and, in the case of the Proxy Statement, at the time
that it or any amendment or supplement thereto is mailed to the Company's
stockholders, at the time of the Company Stockholders' Meeting or at the
Effective Time, will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading; provided, that the foregoing shall not apply to
information supplied by or on behalf of the Company specifically for inclusion
or incorporation by reference in any such document. The Offer Documents will
comply as to form in all material respects with the provisions of the Exchange
Act, except that no representations is made by Parent or Purchaser with respect
to statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference therein.
SECTION 6.6 Sufficient Funds. Parent has access to sufficient funds to
consummate the Offer and the Merger on the terms contemplated by this Agreement.
SECTION 6.7 Brokers. Except for Xxxxxx Xxxxxxx & Co. Incorporated and
CSP Associates Inc., no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of Parent or Purchaser.
ARTICLE VII
COVENANTS
SECTION 7.1 Conduct of Business of the Company. The Company hereby
covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contemplated by this Agreement or consented to in writing by Parent,
it will and will cause each of its Subsidiaries to:
(a) operate its business in the usual and ordinary course consistent with
past practices;
(b) use all reasonable efforts to preserve intact its business
organization, maintain its rights and franchises, retain the services of its
respective key employees and maintain its relationships with its respective
customers and suppliers and others having business dealings with it to the end
that its goodwill and ongoing business shall be unimpaired at the Effective
Time;
(c) maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted, and maintain supplies
and inventories in quantities consistent with its customary business practice;
and
(d) use all reasonable efforts to keep in full force and effect insurance
and bonds comparable in amount and scope of coverage to that currently
maintained.
SECTION 7.2 Prohibited Actions by the Company.
Without limiting the generality of Section 7.1, except as set forth in
Section 7.2 of the Company's Disclosure Letter, the Company covenants and agrees
that, except as expressly contemplated by this Agreement or otherwise consented
to in writing by Parent, from the date of this
AGREEMENT AND PLAN OF MERGER
-22-
Agreement until the Effective Time, it will not do, and will not permit any of
its Subsidiaries to do, any of the following:
(a) (i) increase the compensation payable to or to become payable to
any director or employee, except for increases in salary or wages of
employees in the ordinary course of business and consistent with past
practice; (ii) grant any severance or termination pay (other than pursuant
to the normal severance policy or practice of the Company or its
Subsidiaries as in effect on the date of this Agreement) to, or enter into
or amend in any material respect any employment or severance agreement
with, any employee; (iii) establish, adopt, enter into or amend in any
material respect any collective bargaining agreement or Benefit Plan of the
Company or its Subsidiaries except as required by applicable Law or (iv)
take any action to accelerate any rights or benefits, or make any material
determinations not in the ordinary course of business consistent with past
practice, under any collective bargaining agreement or Benefit Plan of the
Company or its Subsidiaries; provided that the Company may amend the
Company Option Plans to accelerate the vesting of any unvested Company
Stock Options and to permit employees to tender any shares of Company
Common Stock acquired upon exercise of any Company Stock Option into the
Offer;
(b) declare, set aside or pay any dividend on, or make any other
distribution in respect of (whether in cash, stock or property),
outstanding shares of capital stock, except for dividends by a wholly owned
Subsidiary of the Company to the Company or another wholly owned Subsidiary
of the Company;
(c) redeem, purchase or otherwise acquire, or offer to redeem,
purchase or otherwise acquire, any outstanding shares of capital stock of,
or other equity interests in, or any securities that are convertible into
or exchangeable for any shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in, the
Company or any of its Subsidiaries (other than (i) any such acquisition by
the Company or any of its wholly owned Subsidiaries directly from any
wholly owned Subsidiary of the Company in exchange for capital
contributions or loans to such Subsidiary, (ii) any purchase, forfeiture or
retirement of shares of Company Common Stock or the Company Stock Options
occurring pursuant to the terms (as in effect on the date of this
Agreement) of any existing Benefit Plan of the Company or any of its
Subsidiaries or (iii) the repurchase of Company Rights pursuant to the
terms (as in effect on the date of this Agreement) of the Company's Rights
Agreement to the extent required by this Agreement or by a Court of
competent jurisdiction;
(d) effect any reorganization or recapitalization; or split, combine
or reclassify any of the capital stock of, or other equity interests in,
the Company or any of its Subsidiaries or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of such capital stock or such equity interests;
(e) offer, sell, issue or grant, or authorize the offering, sale,
issuance or grant of, any shares of capital stock of, or other equity
interests in, any securities convertible into or exchangeable for any
shares of capital stock of, or other equity interests in, or any options,
warrants or rights of any kind to acquire any shares of capital stock of,
or other equity interests in, or any Voting Company Debt or other voting
securities of, the Company or any of its Subsidiaries, or any "phantom"
stock, "phantom" stock rights, stock appreciation rights or stock-based
performance units, other than issuances of shares of Company Common Stock
(and associated Company Rights) upon the exercise of the Company Stock
Options and
AGREEMENT AND PLAN OF MERGER
-23-
Warrants outstanding at the date of this Agreement in accordance with the
terms thereof (as in effect on the date of this Agreement);
(f) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or in any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire any
assets of any other Person (other than the purchase of assets from
suppliers or vendors in the ordinary course of business and consistent with
past practice);
(g) sell, lease, exchange or otherwise dispose of, or grant any Lien
(other than a Permitted Encumbrance) with respect to, any of the properties
or assets of the Company or any of its Subsidiaries that are, individually
or in the aggregate, material to any of the Company's three core business
segments (information systems, aerospace and systems technologies), except
for dispositions of excess or obsolete assets and sales of inventories in
the ordinary course of business and consistent with past practice;
(h) adopt any amendments to its certificate of incorporation or bylaws
or other organizational documents;
(i) effect any change in any accounting methods, principles or
practices in effect as of December 31, 1997 materially affecting the
reported consolidated assets, liabilities or results of operations of the
Company, except as may be required by a change in GAAP, or any change in
Tax accounting;
(j) (i) incur any Indebtedness, 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, except for short-term
borrowings incurred in the ordinary course of business consistent with past
practice, or (ii) make any loans, advances or capital contributions to, or
investments in, any other Person, other than to or in the Company or any
direct or indirect wholly owned Subsidiary of the Company;
(k) enter into any contract which, if such contract is entered into,
would be a Material Contract; or
(l) make or agree to make any new capital expenditure or expenditures
other than the capital expenditures contemplated by the Company's annual
operating plan for 1998, a copy of which has been furnished to Parent prior
to the execution of this Agreement;
(m) make any non-routine Tax election or settle or compromise any
Material Tax liability or refund;
(n) (i) pay, discharge or satisfy any claims, liabilities or
obligations (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, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the
notes thereto) of the Company
AGREEMENT AND PLAN OF MERGER
-24-
included in the Filed SEC Documents or incurred in the ordinary course of
business consistent with past practice, (ii) cancel any Material
Indebtedness (individually or in the aggregate) or waive any claims or
rights of substantial value or (iii) subject to Section 7.15, waive the
benefits of, or agree to modify in any manner, any confidentiality,
standstill or similar agreement to which the Company or any of its
Subsidiaries is a party; or
(o) agree in writing or otherwise to do any of the foregoing.
SECTION 7.3 No Solicitation.
(a) From the date of this Agreement until the Effective Time or the
termination of this Agreement pursuant to Section 9.1, the Company agrees that
it will not, and will not permit any of its Subsidiaries, or any of its or their
officers, directors, employees, representatives, agents, or Affiliates,
including any investment banker, attorney, or accountant retained by the Company
or any of its Subsidiaries (collectively, "Representatives"), to, directly or
indirectly (i) initiate, solicit or encourage or otherwise facilitate (including
by way of furnishing information), or take any other action to facilitate, any
inquiries or the making of any proposal or offer that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal, (ii) enter into or
maintain or continue discussions or negotiate with any Person regarding an
Acquisition Proposal or in furtherance of such inquiries or to obtain an
Acquisition Proposal, or (iii) agree to, approve, recommend or endorse any
Acquisition Proposal, or authorize or permit any of the Representatives of the
Company or any of its Subsidiaries to take any such action, and the Company
shall promptly notify Parent of any such inquiries and proposals hereafter
received by the Company or any of its Subsidiaries or by any such
Representative, relating to any of such matters; provided however, that nothing
contained in this Agreement shall prohibit the Board of Directors of the Company
at any time prior to the earlier to occur of acceptance for payment of shares of
Company Common Stock pursuant to the Offer or adoption of this Agreement by the
stockholders of the Company from furnishing information (pursuant to a customary
confidentiality agreement no more favorable to the party receiving information
than the Confidentiality Agreement and consistent with the Company's obligations
under this Agreement, including Section 7.3(c)) to, or engaging in discussions
or negotiations with, any Person in response to an unsolicited bona fide written
Acquisition Proposal of such Person that satisfies the requirements of a
Superior Proposal, if, and only to the extent that, (A) the Board of Directors
of the Company, after consultation with outside legal counsel to the Company,
determines in good faith that failure to do so would result in a breach of the
fiduciary duty of the Board of Directors of the Company to the stockholders of
the Company under applicable Law, and (B) prior to furnishing such information
to, or entering into discussions or negotiations with, such Person the Company
provides written notice to Parent to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such Person
and the Company complies with Section 7.3(c). Taking the actions contemplated
by the proviso to the prior sentence under the circumstances described therein
will not be deemed to be a breach of this Agreement. It is understood that any
violation of the restrictions set forth in this Section 7.3 by any
Representative of the Company or any of its Subsidiaries, whether nor not such
Person is purporting to act on behalf of the Company or otherwise, shall be
deemed to be a breach of this Section 7.3 by the Company.
(b) Except as expressly permitted by this Section 7.3, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to Parent or
Purchaser, the approval or recommendation by such Board of the Offer or the
Merger as set forth in Section 2.2, (ii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar
AGREEMENT AND PLAN OF MERGER
-25-
agreement (each, an "Acquisition Agreement") related to any Acquisition
Proposal. Notwithstanding the foregoing, prior to the earlier to occur of
acceptance for payment of shares of Company Common Stock pursuant to the Offer
or adoption of this Agreement by the stockholders of the Company, the Board of
Directors of the Company may terminate this Agreement but only (A) to the extent
that the Board of Directors of the Company, after consultation with outside
legal counsel to the Company, determines in good faith that failure to do so
would result in a breach of the fiduciary duty of the Board of Directors to the
stockholders of the Company under applicable Law, (B) if the Company and the
Board of Directors of the Company have complied with all the provisions of this
Section 7.3, (C) after the third day following Parent's receipt of written
notice advising Parent that the Board of Directors of the Company is prepared to
accept a Superior Proposal, specifying the principal terms and conditions of
such Superior Proposal and identifying the Person making such Superior Proposal
and (D) if concurrently with such termination, the Company enters into an
Acquisition Agreement with respect to such Superior Proposal and pays to Parent
the Termination Fee and the out-of-pocket fees and expenses incurred by Parent,
Purchaser and their Affiliates in connection with the transactions contemplated
by this Agreement pursuant to Section 9.5(b).
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 7.3, the Company shall promptly advise Parent,
orally and in writing, of any request for information or of any Acquisition
Proposal, the principal terms and conditions of such request or Acquisition
Proposal and the identity of the Person making such request or Acquisition
Proposal. The Company shall keep Parent reasonably informed of the status and
details (including amendments or proposed amendments) of any such request or
Acquisition Proposal.
(d) "Acquisition Proposal" means an inquiry, offer or proposal regarding
any of the following (other than the transactions contemplated by this
Agreement) involving the Company: (i) any merger, consolidation, share exchange,
recapitalization, liquidation, dissolution, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of a substantial portion of the assets of the Company and
its Subsidiaries, taken as a whole, or of any Material Business or of any
Subsidiary or Subsidiaries responsible for a Material Business in a single
transaction or series of related transactions; (iii) any acquisition of 15
percent or more of the outstanding shares of capital stock of the Company or the
filing of a registration statement under the Securities Act in connection
therewith or any other acquisition or disposition the consummation of which
would prevent or materially diminish the benefits to Parent of the Merger; or
(iv) any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing. "Superior
Proposal" means any proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or other similar transaction, for consideration
consisting of cash and/or marketable securities, all the shares of Company
Common Stock then outstanding or not less than 75 percent of the assets of the
Company and its Subsidiaries which the Board of Directors of the Company
determines in good faith (based on advice of a financial advisor of nationally
recognized reputation) to be superior to the Company's stockholders from a
financial point of view (taking into account any changes to the financial terms
of this Agreement proposed by Parent in response to such proposal) and to be
more favorable generally to the Company's stockholders (taking into account all
financial and strategic considerations, including relevant legal, financial,
regulatory and other aspects of such proposal and the third party making such
proposal and the conditions and prospects for completion of such proposal, and
any changes to this Agreement proposed by Parent in response to such proposal)
than the Offer, the Merger and the other transactions contemplated by this
Agreement, taken as a whole. "Material Business" means any business (or the
assets needed to carry
AGREEMENT AND PLAN OF MERGER
-26-
out such business) that contributed or represented 15% or more of the net sales,
the net income or the assets (including equity securities) of the Company and
its Subsidiaries taken as a whole.
(e) Nothing contained in this Section 7.3 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule 14e-
2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders which the Board of Directors of the Company, after
consultation with outside legal counsel to the Company, determines in good faith
is required by the fiduciary duty of the Board of Directors to the stockholders
of the Company under applicable Law; provided that neither the Board of
Directors of the Company nor any committee thereof withdraws or modifies, or
proposes to withdraw or modify, the approval or recommendation of such Board of
the Offer or the Merger as set forth in Section 2.2 or approves or recommends,
or publicly proposes to approve or recommend, an Acquisition Proposal unless the
Company and the Board of Directors of the Company have complied with all the
provisions of this Section 7.3.
SECTION 7.4 Access to Information. Between the date of this Agreement
and the Effective Time, the Company shall, and shall cause its Subsidiaries to,
(a) afford to Parent and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives full access during
normal business hours and at all other reasonable times to the officers,
employees, agents, properties, offices and other facilities of the Company and
its Subsidiaries and to their books and records and (b) furnish promptly to
Parent and its Representatives a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities Laws and such other information
concerning the business, properties, contracts, records and personnel of the
Company and its Subsidiaries (including financial, operating and other data and
information) as may be reasonably requested, from time to time, by or on behalf
of Parent.
SECTION 7.5 Confidentiality Agreement. The parties agree that the
provisions of the Confidentiality Agreement shall remain binding and in full
force and effect and that the terms of the Confidentiality Agreement are
incorporated herein by reference; provided, however, that any consents from the
Company necessary under the Confidentiality Agreement for Parent and Purchaser
to consummate the transactions contemplated by this Agreement and the
Stockholders Agreement shall be deemed to have been made. The parties shall
comply with, and shall cause their respective Representatives to comply with,
all of their respective obligations under the Confidentiality Agreement until
Purchaser purchases a majority of the outstanding shares of Company Common Stock
pursuant to the Offer.
SECTION 7.6 Reasonable Efforts. Subject to the terms and conditions of
this Agreement and, including the provisions of Sections 7.7 and 7.8, each of
the parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable Laws to consummate and make
effective as soon as reasonably practicable the transactions contemplated by
this Agreement including (a) cooperating in the preparation and filing of all
applications, requests, consents and other filings required by applicable
Governmental Authorities or Courts, including the Offer Documents, the Schedule
14D-9, the Proxy Statement and any amendments and supplements to any thereof;
(b) taking all action reasonably necessary, proper or advisable to secure any
necessary consents, approvals or waivers from third parties, including under
existing debt obligations of the Company and its Subsidiaries or to amend the
notes, indentures or agreements relating to such existing debt obligations to
the extent required by such notes, indentures or agreements, or to redeem or
repurchase such debt obligations; (c) contesting any pending legal proceeding,
whether judicial or administrative, relating to the Offer or the Merger
including seeking to have any stay or temporary
AGREEMENT AND PLAN OF MERGER
-27-
restraining order entered by any Court or other Governmental Authority vacated
or reversed; and (d) executing any additional instruments necessary to
consummate the transactions contemplated hereby and thereby. In case at any time
after the Effective Time any further action is necessary to carry out the
purposes of this Agreement, the proper officers and directors of each party
hereto shall use all reasonable efforts to take all such necessary action.
SECTION 7.7 Permits. Each of the Company, Parent and Purchaser shall
cooperate and use their respective reasonable efforts to make all filings, to
obtain all actions or nonactions, waivers, Permits and Orders of Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement and to take all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Authority. Each of the parties hereto will furnish to the other
parties such necessary information and reasonable assistance as such other
parties may reasonably request in connection with the foregoing.
SECTION 7.8 HSR Act and Exon-Xxxxxx Filings.
(a) In addition to and without limiting the agreements of Parent, Purchaser
and the Company contained in Sections 7.6 and 7.7, Parent, Purchaser and the
Company will (i) take promptly all actions necessary to make the filings
required of Parent, Purchaser, the Company or any of their Affiliates under the
HSR Act and Exon-Xxxxxx, (ii) comply at the earliest practicable date with any
request for additional information or documentary material received by Parent,
Purchaser, the Company or any of their respective Affiliates from the Federal
Trade Commission or the Antitrust Division of the Department of Justice pursuant
to the HSR Act, or from CFIUS under Exon-Xxxxxx, and (iii) cooperate in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement (A) under the HSR Act commenced by
the Federal Trade Commission or the Antitrust Division of the Department of
Justice, or (B) under Exon-Xxxxxx, commenced by CFIUS.
(b) In furtherance and not in limitation of the covenants contained in
Section 7.7 and Section 7.8(a), Parent, Purchaser and the Company shall each use
all reasonable efforts to resolve such objections, if any, as may be asserted
with respect to the Offer, the Merger or any other transactions contemplated by
this Agreement under the HSR Act or Exon-Xxxxxx; provided, that neither Parent
nor any of its Subsidiaries shall be required to divest any asset or enter into
any consent decree.
(c) Each of the Company, Parent and Purchaser shall promptly inform the
other party of any material communication received by such party from the
Federal Trade Commission, the Antitrust Division of the Department of Justice,
CFIUS, or any other Governmental Authority regarding any of the transactions
contemplated hereby.
SECTION 7.9 Public Announcements. Parent, Purchaser and the Company
will consult with each other before issuing any press release or otherwise
making any public statements with respect to the Offer or the Merger or this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation (and affording the other party or parties
an opportunity to comment thereon), except as may be required by applicable Law
or Court process or by obligations pursuant to any listing agreement with the
NASD or any securities exchange.
AGREEMENT AND PLAN OF MERGER
-28-
SECTION 7.10 Employee Agreements.
Parent acknowledges and agrees that all employment agreements,
severance agreements, deferred compensation agreements, and supplemental
retirement agreements with the employees of the Company and its Subsidiaries
that are listed in Section 7.10 of the Company's Disclosure Letter will be
binding and enforceable obligations of the Surviving Corporation to the same
extent as they were binding and enforceable obligations of the Company and its
Subsidiaries as of the date of this Agreement, except as the parties thereto may
otherwise agree.
SECTION 7.11 Company's Rights Agreement; State Takeover Statutes. The
Company shall take all action (including, if necessary, redeeming all the
outstanding Company Rights issued pursuant to the Company's Rights Agreement or
amending or terminating the Company's Rights Agreement) so that the execution,
delivery and performance of this Agreement and the Stockholders Agreement and
the consummation of the Merger and the other transactions contemplated or
permitted by this Agreement and the Stockholders Agreement do not and will not
result in the grant of any Company Rights to any Person under the Company's
Rights Agreement or enable or require any outstanding Company Rights to be
exercised, distributed or triggered. Except as set forth in the first sentence
of this Section 7.11 or as approved in writing by Parent, the Board of Directors
of the Company shall not (a) amend the Company's Rights Agreement or (b) take
any action with respect to, or make any determination under, the Company's
Rights Agreement. If any Distribution Date or Shares Acquisition Date occurs
under the Company's Rights Agreement at any time during the period from the date
of this Agreement to the Effective Time, the Company and Parent shall make such
adjustment to the Offer price as the Company and Parent shall mutually agree so
as to preserve the economic benefits that the Company and Parent each reasonably
expected on the date of this Agreement to receive as a result of the
consummation of the Offer, the Merger and the other transactions contemplated by
this Agreement. The Company will take all steps necessary (a) to exempt the
transactions contemplated by this Agreement and the Stockholders Agreement from
Section 203 of the GCL, (b) to ensure that no other state takeover statute or
similar Law or Regulation is or becomes applicable to this Agreement or the
Stockholders Agreement and (c) if any state takeover statute or similar Law or
Regulation becomes applicable to this Agreement or the Stockholders Agreement,
to ensure that the Offer, the Merger and the other transactions contemplated
hereby and thereby may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Stockholders Agreement and otherwise to
minimize the effect of such Law or Regulation on the Offer, the Merger and the
other transactions contemplated hereby and thereby.
SECTION 7.12 Employee Benefit Plans. Until at least December 31, 1998,
Parent shall provide, or cause to be provided, to all employees of the Company
and its Subsidiaries compensation, incentive pay and benefits that are
substantially comparable in the aggregate to the compensation, incentive pay and
benefits (without taking into account any equity-based compensation, incentive
pay or benefits) provided to such employees by the Company and its Subsidiaries
as of the Offer Closing Date. From and after the Effective Time, Parent shall
grant all employees of the Surviving Corporation and its Subsidiaries on the
Effective Time credit for vesting and eligibility purposes (but not for benefit
accrual purposes) for all service (to the same extent as service with Parent or
any Subsidiary of Parent (other than the Surviving Corporation and its
Subsidiaries) is taken into account with respect to similarly situated employees
of Parent and the Subsidiaries of Parent (other than the Surviving Corporation
and its Subsidiaries)) with the Surviving Corporation and any Subsidiary of the
Surviving Corporation and their respective predecessors prior to the Effective
Time under all Benefit Plans of Parent or its Subsidiaries (other than the
Surviving Corporation and its Subsidiaries) in which such employees shall become
eligible to participate as
AGREEMENT AND PLAN OF MERGER
-29-
if such service with the Surviving Corporation or any Subsidiary of the
Surviving Corporation and their respective predecessors was service with Parent
or any Subsidiary of Parent (other than the Surviving Corporation and its
Subsidiaries), and, with respect to any medical or dental benefit plan in which
such employees become eligible to participate, Parent shall waive any pre-
existing condition exclusions and actively-at-work requirements (provided,
however, that no such waiver shall apply to a pre-existing condition of any
employee of the Surviving Corporation or any Subsidiary of the Surviving
Corporation who was, as of the Offer Closing Date, excluded from participation
in a Benefit Plan of the Surviving Corporation or any Subsidiary of the
Surviving Corporation by virtue of such pre-existing condition) and provided
that any covered expenses incurred (on or before the Offer Closing Date) by an
employee or an employee's covered dependent shall be taken into account for
purposes of satisfying applicable deductible, coinsurance and maximum out-of-
pocket provisions after the Offer Closing Date to the same extent as such
expenses are taken into account for the benefit of similarly situated employees
of Parent and the Subsidiaries of Parent (other than the Surviving Corporation
and its Subsidiaries).
SECTION 7.13 Indemnification of Directors and Officers.
(a) Purchaser agrees that all rights to indemnification for acts or
omissions occurring prior to the Offer Closing Date existing as of the date
hereof in favor of the current or former directors or officers of the Company
and its Subsidiaries as provided in their respective certificates of
incorporation or bylaws shall survive the Merger and shall continue in full
force and effect in accordance with their terms for a period of six years from
the Offer Closing Date. Parent shall cause to be maintained for a period of six
years from the Offer Closing Date the Company's current directors' and officers'
insurance and indemnification policy (the "D&O Insurance") and the current
fiduciary liability insurance policy (the "Fiduciary Insurance") (provided that
Parent may substitute therefor policies or financial guarantees with reputable
and financially sound carriers or other obligors of at least the same coverage
and amounts containing terms and conditions which are no less advantageous) to
the extent that such insurance policies provide coverage for events occurring
prior to the Effective Time for all persons who are directors and officers of
the Company on the date of this Agreement, so long as the aggregate amount to be
paid by the Company after the date of this Agreement for such D&O Insurance and
Fiduciary Insurance during such six-year period would not be in excess of
$350,000 and $150,000, respectively. If, during such six-year period, such
insurance coverage cannot be obtained at all or can only be obtained for an
aggregate amount (including all amounts paid by the Company after the date of
this Agreement) in excess of $350,000, in the case of D&O Insurance, and
$150,000, in the case of Fiduciary Insurance, Parent shall use all reasonable
efforts to cause to be obtained as much D&O Insurance and Fiduciary Insurance as
can be obtained for the remainder of such six-year period for an aggregate
amount (including all amounts paid by the Company after the date of this
Agreement) not in excess of $350,000 and $150,000, respectively, on terms and
conditions no less advantageous than the existing D&O Insurance and the existing
Fiduciary Insurance, respectively.
(b) If any claim or claims shall, subsequent to the Offer Closing Date and
within six years thereafter, be made in writing against any present or former
director or officer of the Company based on or arising out of the services of
such Person prior to the Offer Closing Date in the capacity of such Person as a
director or officer of the Company (and such director or officer shall have
given Parent written notice of such claim or claims within such six year
period), the provisions of subsection (a) of this Section respecting the rights
to indemnity for current or former directors or officers under the certificate
of incorporation and bylaws of the Company and its Subsidiaries shall continue
in effect until the final disposition of all such claims.
AGREEMENT AND PLAN OF MERGER
-30-
(c) Notwithstanding anything to the contrary in this Section 7.13, neither
Parent nor the Surviving Corporation shall be liable for any settlement effected
without its written consent, which shall not be unreasonably withheld.
(d) The provisions of this Section 7.13 are intended to be for the benefit
of, and shall be enforceable by, each Person entitled to indemnification
hereunder and the heirs and representatives of such Person.
(e) Parent shall not permit the Surviving Corporation to merge or
consolidate with any other Person unless the Surviving Corporation shall ensure
that the surviving or resulting entity assumes the obligations imposed by
subsections (a) and (b) of this Section 7.13.
SECTION 7.14 Event Notices and Other Actions. (a) From and after the
date of this Agreement until the Effective Time, each party hereto shall
promptly notify the other parties hereto of (i) the occurrence or nonoccurrence
of any event, the occurrence or nonoccurrence of which has resulted in, or could
reasonably be expected to result in, any condition to the Offer set forth in
Annex B, or any condition to the Merger set forth in Article VIII, not being
satisfied, (ii) the failure of such party to comply with any covenant or
agreement to be complied with by it pursuant to this Agreement which has
resulted in, or could reasonably be expected to result in, any condition to the
Offer set forth in Annex B, or any condition to the Merger set forth in Article
VIII, not being satisfied and (iii) any representation or warranty made by it
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. No delivery
of any notice pursuant to this Section 7.14(a) shall cure any breach of any
representation or warranty of such party contained in this Agreement or
otherwise limit or affect the remedies available hereunder to the party or
parties receiving such notice.
(b) The Company and Parent shall not, and shall not permit any of their
respective Subsidiaries to, take any action or nonaction that would, or that
could reasonably be expected to, result in (i) any of the representations and
warranties of such party set forth in this Agreement that is qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that is not so qualified becoming untrue in any material respect or (iii) except
as otherwise permitted by Section 7.3, any condition to the Offer set forth in
Annex B, or any condition to the Merger set forth in Article VIII, not being
satisfied.
SECTION 7.15 Third Party Standstill Agreements; Tortious Interference.
During the period from the date of this Agreement through the Effective Time,
the Company shall not terminate, amend, modify or waive any provision of any
confidentiality or standstill or similar agreement to which the Company or any
of its Subsidiaries is a party (other than any involving Parent). Subject to
the foregoing, during such period, the Company agrees to enforce, to the fullest
extent permitted under applicable Law, the provisions of any such agreements,
including obtaining injunctions to prevent any breaches of such agreements and
to enforce specifically the terms and provisions thereof in any Court of the
United States or any state thereof having jurisdiction. Notwithstanding the
foregoing, nothing in this Section 7.15 is intended to prevent the Company from
exercising its rights under Section 7.3(a) in accordance with the provisions of
Section 7.3.
AGREEMENT AND PLAN OF MERGER
-31-
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.1 Conditions to Obligations of Each Party Under This Agreement.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived by the parties hereto, in whole or
in part, to the extent permitted by applicable Law:
(a) Company Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the stockholders of
the Company, if required by applicable Law.
(b) No Order. No Court or Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) which is in effect and which has the
effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger.
(c) HSR Act. The applicable waiting period under the HSR Act shall
have expired or been terminated.
SECTION 8.2 Additional Conditions to Obligations of the Parent Companies.
The obligations of the Parent Companies to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived by the Parent Companies, in whole or in part,
to the extent permitted by applicable Law:
(a) Representations and Warranties. Each of the representations and
warranties of the Company in this Agreement shall be true and correct (for
all purposes of this Section 8.2 (a) without giving effect to any Material
or Material Adverse Effect qualifiers or other qualifiers based on
materiality contained therein), as of the date of this Agreement and as of
the Effective Time as though made as of the Effective Time, (other than to
the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be
true and correct as of such date), except to the extent the failure of such
representations and warranties to be true and correct has not had, and
could not be reasonably expected to have, in the aggregate, a Material
Adverse Effect on the Company.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or
prior to the Effective Time.
(c) Certificates of Compliance. The Company shall have furnished
Parent and Purchaser with such certificates and other documents necessary
to evidence the fulfillment of the conditions set forth in this Section 8.2
as Parent or Purchaser may reasonably request.
(d) Company Stock Options. Each of the Company Option Plans shall
have been, or contemporaneously with or by virtue of the Merger will be,
terminated, all required consents shall have been obtained to cancel all
Company Stock Options and Restricted Stock awards in accordance with
Section 3.6(a), and any other program, plan or arrangement providing for
the issuance or grant by the Company or any of its Subsidiaries of any
interest
AGREEMENT AND PLAN OF MERGER
-32-
in respect of the capital stock of the Company or any of its Subsidiaries
(and any interests outstanding under any such plan, program or arrangement)
shall have been, or contemporaneously with or by virtue of the Merger will
be, validly terminated or canceled.
(e) Exon-Xxxxxx Review. The period of time for any applicable review
process by CFIUS relating to the determination of any threat to national
security shall have expired, and CFIUS shall not have taken any action or
made any recommendation to the President of the United States to block or
prevent consummation of the Offer or the Merger.
SECTION 8.3 Additional Condition to Obligations of the Company. The
obligations of the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the condition, which may be
waived by the Company, in whole or in part, to the extent permitted by
applicable Law, that the Parent Companies shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them at or prior to the Effective
Time.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated and the Offer
and the Merger may be abandoned at any time (notwithstanding approval of the
Merger by the stockholders of the Company) prior to the Effective Time:
(a) by mutual written consent of Parent, Purchaser and the Company;
(b) by Parent, Purchaser or the Company if any Court of competent
jurisdiction or other Governmental Authority shall have issued a final
Order or taken any other final action restraining, enjoining or otherwise
prohibiting the consummation of the Offer or the Merger and such Order or
other action is or shall have become nonappealable;
(c) by Parent or Purchaser if due to an occurrence or circumstance
which would result in a failure to satisfy any of the conditions set forth
in Annex B hereto, Purchaser shall have (i) failed to commence the Offer
within the time required by Regulation 14D under the Exchange Act, (ii)
terminated the Offer without purchasing any shares of Company Common Stock
pursuant to the Offer or (iii) failed to accept for payment shares of
Company Common Stock pursuant to the Offer prior to July 31, 1998;
(d) by the Company if (i) there shall not have been a material breach
of any representation, warranty, covenant or agreement on the part of the
Company and Purchaser shall have (A) failed to commence the Offer within
the time required by Regulation 14D under the Exchange Act, (B) terminated
the Offer without purchasing any shares of Company Common Stock pursuant to
the Offer, or (C) failed to accept for payment shares of Company Common
Stock pursuant to the Offer prior to July 31, 1998, or (ii) prior to the
purchase of shares of Company Common Stock pursuant to the Offer,
concurrently with the execution of an Acquisition Agreement under the
circumstances permitted by Section 7.3 provided, that such termination
under this clause (ii) shall not be effective unless the Company and the
Board of Directors of the Company shall have complied with all their
obligations under Section 7.3 and until payment of the Termination Fee and
the out-of-
AGREEMENT AND PLAN OF MERGER
-33-
pocket fees and expenses incurred by Parent, Purchaser and their Affiliates
in connection with the transactions contemplated by this Agreement pursuant
to Section 9.5(b);
(e) by Parent or Purchaser prior to the purchase of shares of Company
Common Stock pursuant to the Offer, if (i) there shall have been a material
breach of any representation or warranty on the part of the Company under
this Agreement which materially adversely affects (or materially delays)
the consummation of the Offer, (ii) there shall have been a material breach
of any covenant or agreement on the part of the Company under this
Agreement which materially adversely affects (or materially delays) the
consummation of the Offer, which shall not have been cured prior to the
earlier of (A) 10 days following notice of such breach and (B) two Business
Days prior to the date on which the Offer expires, provided, however, that
the Company shall have no right to cure and Parent and Purchaser may
immediately terminate this Agreement in the event that such breach by the
Company was wilful or intentional or in the event of a breach of Section
7.3, (iii) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified (including by amendment of Schedule 14D-9)
in a manner adverse to Purchaser its approval or recommendation of the
Offer, the Merger or this Agreement, shall have recommended to the
Company's stockholders a Third Party Acquisition, or shall have authorized
the redemption of any Company Rights, or (iv) there shall not have been
validly tendered and not withdrawn prior to the expiration of the Offer at
least 51 percent of the Fully Diluted Shares and on or prior to such
expiration an entity or group (other than Parent or Purchaser) shall have
made, or, with respect to any proposal that may be existing on the date
hereof, not withdrawn, a proposal with respect to a Third Party
Acquisition; or
(f) by the Company prior to the purchase of any shares of Company
Common Stock pursuant to the Offer if (i) there shall have been a material
breach of any representation or warranty in this Agreement on the part of
Parent or Purchaser which materially adversely affects (or materially
delays) the consummation of the Offer or (ii) there shall have been a
material breach of any covenant or agreement in this Agreement on the part
of Parent or Purchaser which materially adversely affects (or materially
delays) the consummation of the Offer which shall not have been cured prior
to the earliest of (A) 10 days following notice of such breach and (B) two
Business Days prior to the date on which the Offer expires; provided,
however, that Parent and Purchaser shall have no right to cure and the
Company may immediately terminate this Agreement in the event that such
breach by Parent or Purchaser was wilful or intentional.
SECTION 9.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its Affiliates, directors, officers or stockholders, other
than the provisions of this Section 9.2 and Sections 5.19, 6.7, 7.5 and 9.5 and
Article X. Nothing contained in this Section 9.2 shall relieve any party from
liability for any breach of this Agreement.
SECTION 9.3 Amendment. This Agreement may be amended by action taken by
the Company, Parent and Purchaser at any time before or after any adoption of
this Agreement by the stockholders of the Company (whether or not such adoption
is required); provided that after the date of adoption of this Agreement by the
stockholders of the Company, no amendment shall be made that by Law requires
further approval of such stockholders without the approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties. From and after the Control Date, if such date
occurs, and prior to the
AGREEMENT AND PLAN OF MERGER
-34-
Effective Time, any amendment of this Agreement or the Company's certificate of
incorporation or by laws, any termination of this Agreement by the Company, any
extension of time for performance of any of the obligations of Parent or
Purchaser hereunder or any waiver thereof, any waiver of any condition to the
obligations of the Company or any of the Company's rights hereunder or other
action by the Company hereunder will require the concurrence of, and shall be
effective only if approved by, a majority of the Independent Directors, which
action shall be deemed to constitute the action of the full Board of Directors
even if such majority of Independent Directors does not constitute a majority of
all directors then in office; provided, that, if there shall be no Independent
Directors and Parent is not in breach of its obligations to designate
Independent Directors under Section 2.4, such actions may be effected by
majority vote of the entire Board of Directors of the Company, except that no
such action shall amend the terms of this Agreement in a manner materially
adverse to the stockholders of the Company (excluding Purchaser, Parent, and
their respective Affiliates) without the approval of a majority of such
stockholders.
SECTION 9.4 Extension; Waiver. At any time prior to the Effective Time,
a party may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties of the other parties contained herein or in any
document, certificate or writing delivered pursuant hereto or (c) waive
compliance with any of the agreements or conditions of the other parties hereto
contained herein; provided that (i) from and after the Control Date, no
extensions or waivers shall be made which materially adversely affect the rights
of the Company's stockholders hereunder without the approval of a majority of
the Independent Directors if at the time there shall be any Independent
Directors and (ii) after the date of adoption of the Merger by the stockholders
of the Company, no extensions or waivers shall be made that by Law requires
further approval by such stockholders without the approval of such stockholders.
Any agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
SECTION 9.5 Fees, Expenses and Other Payments.
(a) Except as provided in Section 9.5(b) of this Agreement, all fees and
expenses incurred by the parties hereto shall be borne solely and entirely by
the party which has incurred such fees and expenses.
(b) If:
(i) Parent or Purchaser terminates this Agreement pursuant to
Section 9.1(e)(i) or (iv) or pursuant to Section 9.1(e)(ii) other than as a
result of a breach of Section 7.3 or the Company terminates this Agreement
pursuant to Section 9.1(d)(i) under circumstances when Parent had the right
to terminate this Agreement pursuant to Section 9.1(e)(iv), and, in any
such case, within 15 months thereafter the Company enters into an agreement
with respect to the consummation of, or consummates, a Third Party
Acquisition;
(ii) Parent or Purchaser terminates this Agreement pursuant to
Section 9.1(e)(ii) as a result of a breach of Section 7.3 or pursuant to
Section 9.1(e)(iii); or
(iii) the Company terminates this Agreement pursuant to Section
9.1(d)(ii);
then, in each case, the Company (A) shall pay to Parent, within two Business
Days following the execution and delivery of such agreement or such occurrence,
as the case may be, or simultaneously with such termination pursuant to Section
9.1(d)(ii), a fee, in cash, of $40 million (a "Termination
AGREEMENT AND PLAN OF MERGER
-35-
Fee"); provided, that the Company in no event shall be obligated to pay more
than one such $40 million fee with respect to all such agreements and
occurrences and such termination and (B) shall reimburse Parent and Purchaser,
up to a limit of $5 million, for all their reasonable out-of- pocket fees and
expenses actually incurred by Parent, Purchaser or their respective Affiliates
in connection with this Agreement, the Offer, the Merger and the other
transactions contemplated by this Agreement, including financing fees and other
expenses in connection with options on Interest Rate Protection Agreements and
Other Hedging Agreements and all reasonable fees and expenses of counsel,
accountants, investment bankers, experts and consultants to each of Parent or
Purchaser and their respective Affiliates and the expenses of the preparation,
printing, filing and mailing of the Offer Documents.
(c) Any payment required to be made pursuant to Section 9.5(b) of this
Agreement shall be made to Parent by wire transfer of immediately available
funds to an account designated by Parent.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Nonsurvival of Representations, Warranties and Agreements.
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 10.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 10.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses or sent by electronic transmission to the telecopier number specified
below:
(a) If to either of the Parent Companies, to:
GEC Incorporated and
GEC Acquisition Corp.
c/o GEC Marconi N.A., Inc.
Mail Stop 11 CO1
000 Xxxxxx Xxxx
Xxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
AGREEMENT AND PLAN OF MERGER
-36-
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
(b) If to the Company, to:
Tracor, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telecopier No.: (000) 000-0000
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed received on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee. Notice given by mail as set out above shall be deemed received three
days after the date the same is postmarked.
SECTION 10.3 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic 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 hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 10.5 Entire Agreement. This Agreement (together with the
Annexes, the Company's Disclosure Letter and the Confidentiality Agreement)
constitutes the entire agreement
AGREEMENT AND PLAN OF MERGER
-37-
of the parties, and supersedes all prior agreements and undertakings, both
written and oral, among the parties, with respect to the subject matter hereof.
SECTION 10.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of Law or otherwise by any of the parties without the prior
written consent of the other parties, except that Purchaser may assign, in its
sole discretion (but subject to the provisions of Section 3.1), any of or all
its rights, interests and obligations under this Agreement to Parent or to an
Affiliate of Parent, but no such assignment shall relieve Purchaser of any of
its obligations under this Agreement. Any attempted assignment in violation of
this Section 10.6 shall be void. Subject to the preceding sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 10.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns.
SECTION 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right.
SECTION 10.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Delaware, regardless of
the Laws that might otherwise govern under applicable principles of conflicts of
Law.
SECTION 10.10 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 DELAWARE STATE COURT OR ANY
FEDERAL COURT LOCATED IN THE STATE OF DELAWARE, THIS BEING IN ADDITION TO ANY
OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN ADDITION, EACH
OF THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL JURISDICTION
OF ANY DELAWARE STATE COURT OR ANY FEDERAL COURT LOCATED IN THE STATE OF
DELAWARE IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED BY THIS AGREEMENT, (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, (C) AGREES THAT IT WILL NOT BRING ANY ACTION RELATING
TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT IN ANY COURT
OTHER THAN ANY DELAWARE STATE COURT OR ANY FEDERAL COURT SITTING IN THE STATE OF
DELAWARE AND (D) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION
RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED BY
THIS AGREEMENT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION
TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF
DELAWARE OR OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE,
AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
AGREEMENT AND PLAN OF MERGER
-38-
SECTION 10.11 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above by their respective officers or
directors thereunto duly authorized.
GEC INCORPORATED
By: /s/ XXXXXXX XXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director
GEC ACQUISITION CORP.
By: /s/ XXXX XXXXXXX
-------------------------------------
Name: Xxxx Xxxxxxx
Title: Secrectary and Vice President
TRACOR, INC.
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
AGREEMENT AND PLAN OF MERGER
-39-
ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings set
forth below unless the context shall otherwise require:
"Acquisition Agreement" shall have the meaning ascribed to such term in
Section 7.3(b).
"Acquisition Proposal" shall have the meaning ascribed to such term in
Section 7.3(d).
"Affiliate" shall mean, with respect to any Person, any other Person that
controls, is controlled by or is under common control with the former Person.
"Agreement" shall mean the Agreement and Plan of Merger dated as of April
21, 1998 among Parent, Purchaser and the Company, including any amendments
thereto and each Annex (including this Annex A) and Schedule thereto (including
the Company's Disclosure Letter).
"Balance Sheet Date" shall mean December 31, 1997.
"Benefit Plans" shall mean any employee pension benefit plan (whether or
not insured), as defined in Section 3(2) of ERISA, any employee welfare benefit
plan (whether or not insured) as defined in Section 3(1) of ERISA, any plans
that would be employee pension benefit plans or employee welfare benefit plans
if they were subject to ERISA, such as foreign plans and plans for directors,
any employment contracts, severance or termination pay arrangements, any stock
bonus, stock ownership, stock option, stock purchase, stock appreciation rights,
phantom stock or other stock plan (whether qualified or nonqualified), and any
bonus or incentive compensation plan sponsored, maintained or contributed to by
the Company or any of its Subsidiaries for the benefit of any of the present or
former directors, officers, employees, agents, consultants or other similar
representatives providing services to or for the Company or any of its
Subsidiaries in connection with such services or any such plans which have been
so sponsored, maintained, or contributed to within six years prior to the date
of this Agreement; provided, however, that such term shall not include (a)
routine employment policies and procedures developed and applied in the ordinary
course of business and consistent with past practice, including wage, vacation,
holiday and sick or other leave policies, (b) workers compensation insurance and
(c) directors and officers liability insurance.
"Business Day" means any day other than a day on which banks in New York
are authorized or obligated to be closed.
"Capitalized Lease Obligations" shall mean, with respect to any Person, all
rental obligations of such Person which, under GAAP, are or will be required to
be capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with GAAP.
"Certificate" shall mean an outstanding stock certificate which immediately
prior to the Effective Time represented shares of Company Common Stock.
"Certain Stockholders" shall have the meaning ascribed to such term in the
recitals to the Agreement.
"Certificate of Merger" shall have the meaning ascribed to such term in
Section 3.2.
"CFIUS" means Committee on Foreign Investment in the United States, an
interagency committee chaired by a representative of the United States Secretary
of the Treasury.
"Closing" shall have the meaning ascribed to such term in Section 4.4.
"Closing Date" shall mean the date of the Closing as determined pursuant to
Section 4.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Regulations promulgated thereunder.
"Company" shall mean Tracor, Inc., a Delaware corporation.
"Company Common Stock" shall have the meaning ascribed to such term in the
recitals to the Agreement.
"Company Option Plans" shall mean the 1995 Stock Plan for Employees and
Subsidiaries and the 1991 Stock Plan for Employees of Tracor, Inc. and
Subsidiaries and any other arrangement pursuant to which options to acquire
Company Common Stock have been granted to current or former directors or
employees.
"Company Rights" shall have the meaning ascribed to such term in Section
5.3(a).
"Company SEC Documents" shall have the meaning ascribed to such term in
Section 5.7(a).
"Company Stock Options" shall mean stock options granted pursuant to the
Company Option Plans.
"Company Stockholder Approval" shall have the meaning ascribed to such term
in Section 5.4(b).
"Company Stockholders' Meeting" shall have the meaning ascribed to such
term in Section 3.7(b).
"Company's Consolidated Balance Sheet" shall mean the consolidated balance
sheet of the Company as of December 31, 1997 included in the Company's Audited
Consolidated Financial Statements.
"Company's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Company and its Subsidiaries as of December
31, 1997 and December 31, 1996 and the related consolidated statements of income
and cash flows for the fiscal years ended December 31, 1997, 1996 and 1995,
together with the notes thereto, all as audited by Ernst & Young, under their
report with respect thereto dated January 30, 1998 and included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 filed
with the SEC.
"Company's Consolidated Financial Statements" shall mean the Company's
Audited Consolidated Financial Statements and the Company's Unaudited
Consolidated Financial Statements.
AGREEMENT AND PLAN OF MERGER
ANNEX A-2
"Company's Disclosure Letter" shall mean a letter dated the date of the
Agreement delivered by the Company to the Parent Companies concurrently with the
execution of the Agreement, which, among other things, shall identify exceptions
to the Company's representations and warranties contained in Article V and
covenants contained in Article VII by specific section and subsection
references.
"Company's Rights Agreement" shall mean that certain Rights Agreement dated
as of February 17, 1997 between the Company and Xxxxxx Trust and Savings Bank,
as Rights Agent.
"Company's Unaudited Consolidated Financial Statements" shall mean the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
March 31, 1998, and the related consolidated statements of income and cash flows
for the three-month periods ended March 31, 1998 and March 31, 1997, attached to
Section 5.7 of the Company's Disclosure Letter.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement between GEC Marconi N.A., Inc. and the Company dated March 6, 1998.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including any
obligation of any Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or insolvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"control" (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise.
"Control Date" shall have the meaning ascribed to such term in Section 2.4.
"Court" shall mean any court of the United States, any foreign country or
any domestic or foreign state, and any political subdivision thereof, or any
arbitration tribunal and shall include the European Court of Justice.
"Current Benefit Plans" shall mean Benefit Plans that are sponsored,
maintained, or contributed to by the Company or any of its Subsidiaries as of
the date of this Agreement.
"D&O Insurance" shall have the meaning ascribed to such term in Section
7.13(a).
AGREEMENT AND PLAN OF MERGER
ANNEX A-3
"Dissenting Shares" shall have the meaning ascribed to such term in Section
4.3.
"Effective Time" shall mean the date and time of the completion of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with Section 3.2 or such later time as Parent and the
Company may agree and specify in such certificate.
"Environmental Law or Laws" shall mean any and all Laws, enforceable
requirements or Orders of any Governmental Authority pertaining to health or the
environment currently in effect and applicable to a specified Person and its
Subsidiaries, including the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), as amended, the Hazardous & Solid Waste
Amendments Act of 1984, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
the Oil Pollution Act of 1990, as amended ("OPA"), any state or local Laws
implementing the foregoing federal Laws, and all other environmental
conservation or protection Laws. For purposes of the Agreement, the terms
"hazardous substance" and "release" have the meanings specified in CERCLA;
provided, however, that, to the extent the Laws of the state or locality in
which the property is located establish a meaning for "hazardous substance" or
"release" that is broader than that specified in CERCLA, such broader meaning
shall apply within the jurisdiction of such state or locality, and the term
"hazardous substance" shall include all dehydration and treating wastes, waste
(or spilled) oil, and waste (or spilled) petroleum products, and radioactive
material, even if such are specifically exempt from classification as hazardous
substances or hazardous wastes pursuant to CERCLA or RCRA or the analogous
statutes of any jurisdiction applicable to the specified Person or its
Subsidiaries or any of their respective properties or assets.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the Regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the Regulations promulgated thereunder.
"Exchange Agent" shall mean a bank or trust company having a net worth in
excess of $100 million designated and appointed to act in the capacities
required thereof under Section 4.2.
"Exchange Fund" shall mean the fund of cash deposited with the Exchange
Agent pursuant to Section 4.2.
"Exon-Xxxxxx" shall mean Section 721 of the Defense Production Act, 50 App.
U.S.C.A. (Section) 2170 (West 1991 & Supp. 1997).
"Fiduciary Insurance" shall have the meaning ascribed to such term in
Section 7.13(a).
"Filed Company SEC Documents" shall have the meaning ascribed to such term
in Section 5.9.
"Financial Advisor" shall mean XX Xxxxxxxxxx, the financial advisor to the
Company with respect to the transactions contemplated by the Agreement.
AGREEMENT AND PLAN OF MERGER
ANNEX A-4
"Fully Diluted Shares" shall have the meaning ascribed to such term in
Annex B.
"GAAP" shall mean accounting principles generally accepted in the United
States consistently applied by a specified Person.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"Governmental Authority" shall mean any governmental agency or authority
(other than a Court) of the United States, any foreign country, or any domestic
or foreign state, and any political subdivision or agency thereof, and shall
include any multinational authority having governmental or quasi-governmental
powers.
"Government Contract" shall have the meaning ascribed to such term in
Section 5.13.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the Regulations promulgated thereunder.
"Indebtedness" shall mean, as to any Person, (a) all indebtedness
(including principal, interest, fees and charges) of such Person for borrowed
money or for the deferred purchase price of property or services, (b) the
maximum amount available to be drawn under all letters of credit issued for the
account of such Person and all unpaid drawings in respect of such letters of
credit, (c) all Indebtedness of the types described in clause (a), (b), (d),
(e), (f) or (g) of this definition secured by any Lien on any property owned by
such Person, whether or not to be capitalized under leases under which such
Person is the lessee, (d) all Capitalized Lease Obligations of such Person, (e)
all obligations of such Person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, (i.e., take-or-pay and similar
obligations), (f) all Contingent Obligations of such Person and (g) all
obligations under any Interest Rate Protection Agreement or any Other Hedging
Agreement or under any similar type of agreement.
"Independent Directors" shall have the meaning ascribed to such term in
Section 2.4.
"Intellectual Property Rights" shall have the meaning ascribed to such term
in Section 5.18.
"Interest Rate Protection Agreements" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedge agreement or other similar agreement.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, with respect to either the Company or Parent, the
actual knowledge (after reasonable inquiry) of, in the case of the Company, any
officer of the Company listed in such party's 1997 annual report to stockholders
and, in the case of Parent, any executive officer of Parent.
"Laws" shall mean all laws, statutes, ordinances and Regulations of the
United States, any foreign country, or any domestic or foreign state, and any
political subdivision or agency thereof, including all decisions of Courts
having the effect of Law in each such jurisdiction.
"Leaseholds" shall mean, with respect to any Person, all the right, title
and interest of such Person as lessee or licensee, in, to and under leases,
licenses, improvements and/or fixtures.
AGREEMENT AND PLAN OF MERGER
ANNEX A-5
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing), any conditional sale or other title retention agreement, any lease
in the nature thereof or the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
"Loan Agreement" shall mean that certain Credit Agreement, dated as of
March 14, 1997, among the Company and various banks, Credit Lyonnais, New York
branch, The First National Bank of Chicago and Xxxxx Fargo Bank (Texas),
National Association (as co-agents) and Bankers Trust Company (as agent), as
amended.
"Material" shall mean is or will be material to the business, properties,
assets, condition (financial and other) or results of operations of a specified
Person and its Subsidiaries, if any, taken as a whole.
"Material Adverse Effect" shall mean any change or effect that is or will
be material and adverse to the business, properties, assets, condition
(financial and other) or results of operations of a specified Person and its
Subsidiaries, if any, taken as a whole, including a material adverse effect on
the ability of a specified Person to perform its obligations under the Agreement
and, in the case of the Company, (i) a reduction in fair market value
(determined on a discounted cash flow basis) of the Company and its
Subsidiaries, taken as a whole, of $40 million or more or (ii) a material
increase in the aggregate cost to Purchaser of the acquisition of the Company.
"Material Business" shall have the meaning ascribed to such term in Section
7.3(d).
"Material Contract" shall mean each contract, lease, indenture, agreement,
arrangement or understanding to which the Company or any of its Subsidiaries is
a party or to which any of the properties, assets or operations of the Company
or any of its Subsidiaries is subject that is or will be material to the
business, properties, assets, condition (financial and other) or results of
operations of the Company and its Subsidiaries, taken as a whole.
"Merger" shall have the meaning ascribed to such term in Section 3.1.
"Merger Consideration" shall mean, as to any Certificate, the amount to be
paid to the holder thereof pursuant to the Merger, which amount shall be equal
to the product of the number of shares of Company Common Stock evidenced by such
Certificate, multiplied by the Per Share Merger Consideration.
"Minimum Tender Condition" shall have the meaning ascribed to such term in
Annex B.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"National Industrial Security Program Operating Manual" shall mean the
manual promulgated pursuant to the National Industrial Security Program,
established by Executive Order 12829, dated January 6, 1993.
"Offer" shall have the meaning ascribed to such term in the recitals to the
Agreement.
"Offer Closing Date" shall mean the date on which the acceptance for
payment and payment by Purchaser for shares of Company Common Stock tendered
pursuant to the Offer occurs.
AGREEMENT AND PLAN OF MERGER
ANNEX A-6
"Offer Documents" shall have the meaning ascribed to such term in Section
2.1(c).
"Order" shall mean any judgment, order or decree of any Court or
Governmental Authority, federal, foreign, state or local.
"Other Hedging Agreement" shall mean any foreign exchange contract,
currency swap agreement, commodity agreement or other similar agreement or
arrangement designed to protect against the fluctuations in currency values.
"Parent" shall mean GEC Incorporated, a Delaware corporation.
"Parent Companies" shall have the meaning ascribed to such term in the
first paragraph of the Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Per Share Merger Consideration" shall have the meaning ascribed to such
term in Section 4.1(a).
"Permits" shall mean any and all permits, licenses, authorizations, orders,
certificates, registrations or other approvals granted by any Governmental
Authority.
"Permitted Encumbrances" shall mean the following:
(a) inchoate Liens for Taxes, assessments or governmental charges or
levies not yet due or Liens for Taxes, assessments or governmental charges or
levies being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Company or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business and (i) which do not in the aggregate
materially detract from the value of the Company's or such Subsidiary's
properties or assets or materially impair the use thereof in the operation of
the business of the Company or such Subsidiary or (ii) which are being contested
in good faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the properties or assets subject to any
such Lien;
(c) Liens in existence on the Effective Date (as defined in the Loan
Agreement) which are listed, and the property subject thereto described, in
Schedule VII to the Loan Agreement, but only to the respective date, if any, set
forth in such Schedule VII, or the removal and termination of any such Liens,
plus renewals and extensions of such Liens, to the extent set forth in such
Schedule VII provided that (i) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens is not increased from that amount
outstanding at the time of any such renewal or extension, and (ii) any such
renewals or extensions do not encumber any additional assets or properties of
the Company or any of its Subsidiaries;
(d) Liens created pursuant to the pledge agreement in favor of the banks
pursuant to the Loan Agreement.
AGREEMENT AND PLAN OF MERGER
ANNEX A-7
(e) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Company and its
Subsidiaries, taken as a whole;
(f) Liens upon assets subject to Capitalized Lease Obligations existing on
the date hereof or permitted under Section 7.2; provided that (i) such Liens
only serve to secure the payment of Indebtedness arising under such Capitalized
Lease Obligation and (ii) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the Company or
any Subsidiary of the Company;
(g) Liens placed upon (i) equipment or machinery used in the ordinary
course of business of the Company or any of its Subsidiaries or (ii) Real
Property (as defined in the Loan Agreement) of the Company or any of its
Subsidiaries, in each case at the time of acquisition thereof by the Company or
any such Subsidiary or within sixty days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof; provided that
(A) the aggregate principal amount of all Indebtedness secured by Liens
permitted by this clause (g) incurred in any fiscal year of the Company,
together with the amount of all Capitalized Lease Obligations incurred in such
fiscal year, does not exceed that aggregate amount permitted by Section
9.04(vii) of the Loan Agreement and (B) in all events, the Lien encumbering the
equipment, machinery or Real Property so acquired does not encumber any other
asset of the Company or such Subsidiary;
(h) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case not
securing Indebtedness and not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statement filings
regarding operating leases;
(j) Liens arising out of judgments or awards in respect of which the
Company or any of its Subsidiaries shall in good faith be prosecuting an appeal
or proceedings for review in respect of which there shall have been secured a
subsisting stay of execution pending such appeal or proceedings; provided that
the aggregate amount of all such judgments or awards does not exceed $15,000,000
at any time outstanding;
(k) statutory and common law landlords' Liens under leases to which the
Company or any of its Subsidiaries is a party; and
(l) Liens resulting from pledges or deposits to secure payments of
workmen's compensation, unemployment insurance or other social security programs
or securing the performance of surety and bid and performance bonds, tenders,
leases and other obligations of similar nature, in each case incurred in the
ordinary course of business (exclusive of obligations in respect of the payment
for borrowed money).
"Person" shall mean an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association or
unincorporated organization, or any other form of business or professional
entity, but shall not include a Governmental Authority.
"Proxy Statement" shall mean a proxy statement conforming to the
requirements of the Exchange Act and relating to the adoption of this Agreement
by the Company's stockholders, if such adoption is required by Law.
AGREEMENT AND PLAN OF MERGER
ANNEX A-8
"Purchaser" shall mean GEC Acquisition Corp., a Delaware corporation and a
wholly owned Subsidiary of Parent.
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of Law.
"Reports" shall mean, with respect to a specified Person, all reports,
registrations, filings and other documents and instruments required to be filed
by the specified Person or any of its Subsidiaries with any Governmental
Authority (other than the SEC).
"Representatives" shall have the meaning ascribed to such term in Section
7.3(a).
"Restricted Stock" shall have the meaning ascribed to such term in Section
3.6(a).
"Schedule 14D-1" shall have the meaning ascribed to such term in Section
2.1(c).
"Schedule 14D-9" shall have the meaning ascribed to such term in Section
2.2.
"SEC" shall mean the Securities and Exchange Commission.
"SEC Reports" shall mean (a) all Annual Reports on Form 10-K, (b) all
Quarterly Reports on Form 10-Q, (c) all proxy statements relating to meetings of
stockholders (whether annual or special), (d) all Current Reports on Form 8-K
and (e) all other reports, schedules, registration statements or other documents
required to be filed during a specified period by a Person with the SEC pursuant
to the Securities Act or the Exchange Act.
"Section 262" shall have the meaning ascribed to such term in Section 4.3.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.
"Stockholders Agreement" shall have the meaning ascribed to such term in
the recitals to the Agreement.
A "Subsidiary" of a specified Person shall mean any corporation,
partnership, limited liability company, joint venture or other legal entity of
which the specified Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, 50 percent or more of the stock or
other equity or partnership interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
"Superior Proposal" shall have the meaning ascribed to such term in Section
7.3(d).
"Surviving Corporation" shall mean the Company as the corporation surviving
the Merger.
"Tax Returns" shall mean all returns and Reports of or with respect to any
Tax which are required to be filed by or with respect to the Company or any of
its Subsidiaries.
"Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies or
other similar assessments or liabilities, including income taxes, ad valorem
taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or with
respect to gross receipts, premiums, Real Property, personal
AGREEMENT AND PLAN OF MERGER
ANNEX A-9
property, windfall profits, sales, use, transfers, licensing, employment,
payroll and franchises imposed by or under any Law; and such terms shall include
any interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any such tax or any contest or
dispute thereof.
"Terminated Benefit Plans" shall mean Benefit Plans that were sponsored,
maintained, or contributed to by the Company or any of its Subsidiaries within
six years prior to the date of the Agreement but which have been terminated
prior to the date of the Agreement.
"Termination Fee" shall have the meaning ascribed to such term in Section
9.5(b).
"Third Party Acquisition" shall mean (a) the acquisition of the Company by
merger, consolidation, share exchange, recapitalization, liquidation,
dissolution, business combination or other similar transaction by any Person
(which includes for these purposes a "person" as defined in Section 13(d)(3) of
the Exchange Act) other than Parent, Purchaser or any Affiliate thereof (a
"Third Party"); (b) the acquisition by a Third Party of more than 50% of the
assets of the Company and its Subsidiaries, taken as a whole; (c) the
acquisition by a Third Party of 50% or more of the outstanding Company Common
Stock or 50% or more of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Company; (d) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend; or (e) the purchase by the Company or any of its
Subsidiaries of more than 30 percent of the outstanding shares of Company Common
Stock.
"Voting Company Debt" shall have the meaning ascribed to such term in
Section 5.3(e).
"Warrant Agreement" shall mean the Warrant Agreement, dated as of December
20, 1991, between the Company and Ameritrust Company National Association, as
Warrant Agent.
"Warrants" shall mean the Company's Series A Warrants to purchase shares of
Company Common Stock at an exercise price of $2.54 per share, which were issued
pursuant to the Warrant Agreement.
AGREEMENT AND PLAN OF MERGER
ANNEX A-10
ANNEX B
CONDITIONS OF THE OFFER
(a) Notwithstanding any other term of the Offer or the Agreement,
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-l(c) under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
shares of Company Common Stock promptly after the termination or withdrawal of
the Offer), to pay for any shares of Company Common Stock tendered pursuant to
the Offer unless (i) there shall have been validly tendered and not withdrawn
prior to the expiration of the Offer that number of shares of Company Common
Stock which would represent at least 51% of the Fully Diluted Shares (the
"Minimum Tender Condition"), (ii) any waiting period under the HSR Act
applicable to the purchase of shares of Company Common Stock pursuant to the
Offer shall have expired or been terminated and (iii) the period of time for any
applicable review process by CFIUS relating to the determination of any threat
to national security shall have expired, and CFIUS shall not have taken any
action or made any recommendation to the President of the United States to block
or prevent consummation of the Offer or the Merger. The term "Fully Diluted
Shares" means all outstanding securities entitled generally to vote in the
election of directors of the Company on a fully diluted basis, after giving
effect to the exercise or conversion of all options, warrants, rights and
securities exercisable or convertible into such voting securities, other than
potential dilution attributable to any Company Rights associated therewith.
(b) Furthermore, notwithstanding any other term of the Offer or the
Agreement, Purchaser shall not be required to commence the Offer, accept for
payment or, subject as aforesaid, pay for any shares of Company Common Stock not
theretofore accepted for payment or paid for, and may terminate or amend the
Offer, with the consent of the Company or if, at any time on or after the date
of the Agreement and before the acceptance of such shares for payment or the
payment therefor, any of the following conditions exists:
(i) any representations and warranties of the Company in the
Agreement shall not be true and correct (for all purposes of this
paragraph (i) without giving effect to any Material or Material
Adverse Effect qualifiers or other qualifiers based on materiality
that are contained therein) as of such time (other than to the extent
such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall not be
true and correct as of such date), except to the extent the failure of
such representations and warranties to be true and correct has not
had, and could not be reasonably expected to have, in the aggregate, a
Material Adverse Effect on the Company;
(ii) the Company shall have breached in any material respect any
of its covenants or agreements contained in the Agreement; or
(iii) there shall be threatened or pending any suit, action or
proceeding by any Governmental Authority, or any suit, action or
proceeding by any other Person that has a reasonable likelihood of
success, (A) challenging the acquisition by Parent or Purchaser of any
Company Common Stock, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger, or seeking to obtain from the
Company, Parent or any of their respective Subsidiaries or Affiliates
any damages
AGREEMENT AND PLAN OF MERGER
ANNEX B-1
that are material in relation to the Company and its Subsidiaries
taken as a whole, (B) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their respective
Subsidiaries or Affiliates of any material portion of the business or
assets of the Company, Parent or any of their respective Subsidiaries
or Affiliates, or to compel the Company, Parent or any of their
respective Subsidiaries or Affiliates to dispose of or hold separate
any material portion of the business or assets of the Company, Parent
or any of their respective Subsidiaries or Affiliates, as a result of
the Offer, the Merger or any of the other transactions contemplated by
the Agreement, (C) seeking to impose limitations on the ability of
Parent or any of its Subsidiaries or Affiliates to acquire or hold, or
exercise full rights of ownership of, any shares of Company Common
Stock, including the right to vote Company Common Stock purchased by
it on all matters properly presented to the stockholders of the
Company, (D) seeking to prohibit Parent or any of its Subsidiaries or
Affiliates from effectively controlling in any material respect the
business or operations of the Company and its Subsidiaries, or (E)
which otherwise is reasonably likely to have a Material Adverse Effect
on the Company;
(iv) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction threatened, proposed,
sought, enacted, entered, enforced, promulgated, amended or issued
with respect to, or deemed applicable to, or any consent or approval
withheld with respect to, (A) Parent, the Company or any of their
respective Subsidiaries or Affiliates or (B) the Offer or the Merger
by any Governmental Authority that has or is reasonably likely to
result, directly or indirectly, in any of the consequences referred to
in paragraph (iii) above;
(v) except as disclosed in the Company Disclosure Letter, since
the date of the Agreement there shall have occurred any event, change,
effect or development that, individually or in the aggregate, has had
or is reasonably likely to have, a Material Adverse Effect on the
Company;
(vi) there shall have occurred and be continuing (A) any general
suspension of trading in, or limitation on prices for, securities on
any national securities exchange or in the over-the-counter market in
the United States or in the United Kingdom, (B) any material adverse
change in the financial markets or major stock exchange indices in the
United States or in the United Kingdom, (C) any material adverse
change in United States currency exchange rates or in the United
Kingdom currency exchange rate with respect to the United States
dollar or a suspension of, or limitation on, the markets therefor, (D)
a declaration of a banking moratorium by any Governmental Authority or
any suspension of payments by any Governmental Authority in respect of
banks in the United States or in the United Kingdom, (E) any
limitation (whether or not mandatory) by any Governmental Authority in
the United States or in the United Kingdom on, or other event that
might materially affect, the extension of credit by banks or other
lending institutions, (F) a commencement of a war or armed hostilities
or other national or international calamity directly or indirectly
involving the United States or the United Kingdom or (G) in the case
of any of the foregoing existing on the date of the Agreement, a
material acceleration or worsening thereof;
(vii) any Person (which includes a "person" as such term is
defined in Section 13(d)(3) of the Exchange Act) other than Purchaser,
any of its Affiliates, or any group of which any of them is a member
shall have acquired beneficial
AGREEMENT AND PLAN OF MERGER
ANNEX B-2
ownership of more than 10 percent of the outstanding shares of Company
Common Stock or shall have entered into a definitive agreement or an
agreement in principle with the Company with respect to a tender offer
or exchange offer for any shares of Company Common Stock or a merger,
consolidation or other business combination with or involving the
Company or any of its Subsidiaries; or
(viii) the Agreement shall have been terminated in accordance
with its terms.
which, in the sole judgment of Purchaser or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition (including any
action or inaction by Parent or any of its Affiliates), makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to such condition or may be waived by Purchaser and
Parent in whole or in part at any time and from time to time in their sole
discretion; provided that the condition set forth in clause (b)(viii) above and
the Minimum Tender Condition may be waived or modified only by the mutual
consent of Purchaser and the Company. The failure by Parent, Purchaser or any
other Affiliate of Parent at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
AGREEMENT AND PLAN OF MERGER
ANNEX B-3
