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EXHIBIT 10(m)
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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 25, 1999
AMONG
UNITRODE CORPORATION
TEXAS INSTRUMENTS INCORPORATED
AND
UNICORN ACQUISITION CORP.
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TABLE OF CONTENTS
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Article I THE MERGER.................................................................................2
SECTION 1.1 The Merger........................................................................2
SECTION 1.2 Effective Time....................................................................2
SECTION 1.3 Closing of the Merger.............................................................2
SECTION 1.4 Effects of the Merger.............................................................2
SECTION 1.5 Charter and Bylaws................................................................2
SECTION 1.6 Directors.........................................................................3
SECTION 1.7 Officers..........................................................................3
Article II CONVERSION OF SECURITIES...................................................................3
SECTION 2.1 Conversion of Shares..............................................................3
SECTION 2.2 Stock Options.....................................................................4
SECTION 2.3 Exchange Fund.....................................................................5
SECTION 2.4 Exchange Procedures...............................................................6
SECTION 2.5 Distributions with Respect to Unsurrendered Certificates..........................6
SECTION 2.6 No Further Ownership Rights in Company Common Stock...............................7
SECTION 2.7 No Fractional Shares of Parent Common Stock.......................................7
SECTION 2.8 Termination of Exchange Fund......................................................7
SECTION 2.9 No Liability......................................................................7
SECTION 2.10 Investment of the Exchange Fund...................................................8
SECTION 2.11 Lost Certificates.................................................................8
SECTION 2.12 Withholding Rights................................................................8
SECTION 2.13 Stock Transfer Books..............................................................8
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................................8
SECTION 3.1 Organization and Qualification; Subsidiaries......................................9
SECTION 3.2 Capitalization of the Company and Its Subsidiaries................................9
SECTION 3.3 Authority Relative to This Agreement.............................................10
SECTION 3.4 SEC Reports; Financial Statements................................................11
SECTION 3.5 No Undisclosed Liabilities.......................................................11
SECTION 3.6 Absence of Changes...............................................................11
SECTION 3.7 Information Supplied.............................................................13
SECTION 3.8 Consents and Approvals...........................................................14
SECTION 3.9 No Default.......................................................................14
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SECTION 3.10 Real Property....................................................................15
SECTION 3.11 Litigation.......................................................................17
SECTION 3.12 Compliance with Applicable Law; Permits..........................................17
SECTION 3.13 Employee Plans...................................................................18
SECTION 3.14 Labor Matters....................................................................20
SECTION 3.15 Environmental Matters............................................................21
SECTION 3.16 Tax Matters......................................................................23
SECTION 3.17 Absence of Questionable Payments.................................................24
SECTION 3.18 Material Contracts...............................................................25
SECTION 3.19 Subsidies........................................................................26
SECTION 3.20 Intellectual Property............................................................26
SECTION 3.21 Year 2000........................................................................28
SECTION 3.22 Opinion of Financial Advisor.....................................................29
SECTION 3.23 Brokers..........................................................................29
SECTION 3.24 Accounting Matters...............................................................29
SECTION 3.25 Recalls..........................................................................29
SECTION 3.26 Takeover Statute.................................................................29
SECTION 3.27 Company Rights Agreement.........................................................29
Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...................................30
SECTION 4.1 Organization.....................................................................30
SECTION 4.2 Authority Relative to This Agreement.............................................30
SECTION 4.3 SEC Reports; Financial Statements................................................31
SECTION 4.4 Undisclosed Liabilities..........................................................31
SECTION 4.5 Capitalization of Parent.........................................................32
SECTION 4.6 Information Supplied.............................................................32
SECTION 4.7 Consents and Approvals; No Violations............................................32
SECTION 4.8 No Prior Activities..............................................................33
SECTION 4.9 Brokers..........................................................................33
SECTION 4.10 Accounting Matters...............................................................33
Article V COVENANTS RELATED TO CONDUCT OF BUSINESS..................................................33
SECTION 5.1 Conduct of Business of the Company...............................................33
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SECTION 5.2 Conduct of Business of Parent....................................................36
SECTION 5.3 Access to Information............................................................37
Article VI ADDITIONAL AGREEMENTS.....................................................................37
SECTION 6.1 Preparation of S-4 and the Proxy Statement.......................................37
SECTION 6.2 Letter of Accountants............................................................38
SECTION 6.3 Meeting..........................................................................38
SECTION 6.4 Reasonable Best Efforts..........................................................38
SECTION 6.5 Acquisition Proposals............................................................40
SECTION 6.6 Public Announcements.............................................................41
SECTION 6.7 Indemnification..................................................................42
SECTION 6.8 Notification of Certain Matters..................................................43
SECTION 6.9 Tax-Free Reorganization Treatment................................................43
SECTION 6.10 Employee Matters.................................................................43
SECTION 6.11 Company Affiliate Agreements.....................................................44
SECTION 6.12 SEC and Other Filings............................................................44
SECTION 6.13 Fees and Expenses................................................................44
SECTION 6.14 Obligations of Merger Sub........................................................45
SECTION 6.15 Listing of Stock.................................................................45
SECTION 6.16 Antitakeover Statutes............................................................45
SECTION 6.17 Termination of Credit Agreement..................................................45
SECTION 6.18 Benchmarq........................................................................45
Article VII CONDITIONS TO CONSUMMATION OF THE MERGER..................................................45
SECTION 7.1 Conditions to Each Party's Obligations to Effect the Merger......................45
SECTION 7.2 Conditions to the Obligations of Parent and Merger Sub...........................46
SECTION 7.3 Conditions to the Obligations of the Company.....................................47
Article VIII TERMINATION; AMENDMENT; WAIVER............................................................48
SECTION 8.1 Termination by Mutual Agreement..................................................48
SECTION 8.2 Termination by Either Parent or the Company......................................48
SECTION 8.3 Termination by the Company.......................................................49
SECTION 8.4 Termination by Parent............................................................49
SECTION 8.5 Effect of Termination and Abandonment............................................50
SECTION 8.6 Amendment........................................................................51
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SECTION 8.7 Extension; Waiver................................................................51
Article IX MISCELLANEOUS.............................................................................51
SECTION 9.1 Entire Agreement; Assignment.....................................................51
SECTION 9.2 Notices..........................................................................51
SECTION 9.3 Governing Law....................................................................53
SECTION 9.4 Descriptive Headings.............................................................53
SECTION 9.5 Parties in Interest..............................................................53
SECTION 9.6 Severability.....................................................................53
SECTION 9.7 Specific Performance.............................................................53
SECTION 9.8 Counterparts.....................................................................53
SECTION 9.9 Interpretation...................................................................54
SECTION 9.10 Definitions......................................................................54
EXHIBITS
Voting Agreement A
Company Affiliate Agreement B
Option Agreement C
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GLOSSARY OF DEFINED TERMS
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Defined Terms Defined in Section
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Acquisition Proposal................................................................................6.5(a)
Antitrust Law..........................................................................................3.8
Articles of Merger.....................................................................................1.2
Assumed Stock Option................................................................................2.2(a)
Average Parent Stock Price..........................................................................2.1(b)
beneficial ownership...............................................................................9.10(a)
beneficially own...................................................................................9.10(a)
business day.......................................................................................9.10(b)
Benefit Plans...................................................................................3.13(a)(i)
Certificates...........................................................................................2.4
Closing................................................................................................1.3
Closing Date ..........................................................................................1.3
Code..............................................................................................Recitals
Company...........................................................................................Preamble
Company Affiliate Agreements......................................................................Recitals
Company Balance Sheet..................................................................................3.4
Company Balance Sheet Date.............................................................................3.4
Company Board.......................................................................................3.3(b)
Company Common Stock................................................................................2.1(b)
Company Common Stock Price..........................................................................2.1(b)
Company Disclosure Schedule....................................................................Article III
Company Option Plan.................................................................................2.2(a)
Company Permits.......................................................................................3.12
Company Requisite Vote..............................................................................3.3(b)
Company Rights Agreement..............................................................................3.27
Company SEC Reports....................................................................................3.4
Company Securities..................................................................................3.2(a)
Company Stock Options...............................................................................2.2(a)
Company Stockholder Meeting............................................................................6.3
Confidentiality Agreement...........................................................................5.3(c)
Covered Transactions..................................................................................3.26
Department.............................................................................................1.2
DOJ.................................................................................................6.4(b)
Effective Time.........................................................................................1.2
Employee Arrangements..........................................................................3.13(a)(ii)
Environmental Law...............................................................................3.15(a)(i)
ERISA...........................................................................................3.13(a)(i)
Exchange Act...........................................................................................3.4
Exchange Agent.........................................................................................2.3
Exchange Fund..........................................................................................2.3
Exchange Ratio......................................................................................2.1(b)
Expenses..............................................................................................6.13
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Financial Advisor.....................................................................................3.22
Former Facilities..................................................................................3.10(a)
FTC.................................................................................................6.4(b)
GAAP...................................................................................................3.4
Governmental Entity....................................................................................3.8
Hazardous Material.............................................................................3.15(a)(ii)
HSR Act................................................................................................3.8
Indemnified Party(ies)..............................................................................6.7(a)
Intellectual Property..............................................................................3.20(a)
IRS................................................................................................3.13(b)
know...............................................................................................9.10(c)
knowledge..........................................................................................9.10(c)
Law....................................................................................................3.9
Lien................................................................................................3.2(b)
Material Adverse Effect............................................................................9.10(d)
Material Contracts.................................................................................3.18(a)
Merger.................................................................................................1.1
Merger Sub........................................................................................Preamble
MGCL...................................................................................................1.1
NYSE................................................................................................2.1(b)
Option Agreement..................................................................................Recitals
Parent............................................................................................Preamble
Parent Board........................................................................................4.2(b)
Parent Common Stock...............................................................................Recitals
Parent Disclosure Schedule......................................................................Article IV
Parent SEC Reports.....................................................................................4.3
person ............................................................................................9.10(e)
Product............................................................................................3.25(c)
Proxy Statement........................................................................................3.7
Real Property Leases............................................................................3.10(c)(i)
Recalls............................................................................................3.25(a)
Release.......................................................................................3.15(a)(iii)
Remedial Action................................................................................3.15(a)(iv)
Rights................................................................................................3.27
S-4....................................................................................................3.7
Scheduled Intellectual Property....................................................................3.20(a)
SEC.................................................................................................2.2(a)
Share(s)............................................................................................2.1(b)
Share Consideration.................................................................................2.1(b)
Stock Purchase Plan.................................................................................2.2(c)
subsidiary.........................................................................................9.10(f)
Superior Proposal...................................................................................6.5(a)
Surviving Corporation..................................................................................1.1
Systems............................................................................................3.21(e)
Takeover Statutes.....................................................................................3.26
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Tax(es)............................................................................................3.16(a)
Tax Returns........................................................................................3.16(a)
Termination Date ...................................................................................8.2(a)
Voting Agreements.................................................................................Recitals
WARN...............................................................................................3.14(d)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 25, 1999, is among
Unitrode Corporation, a Maryland corporation (the "COMPANY"), Texas Instruments
Incorporated, a Delaware corporation ("PARENT"), and Unicorn Acquisition Corp.,
a Maryland corporation and a direct wholly owned subsidiary of Parent ("MERGER
SUB"). Certain capitalized and non-capitalized terms used herein are defined in
Section 9.10.
RECITALS
WHEREAS, the Boards of Directors of the Company, Parent and Merger Sub
each have, in light of and subject to the terms and conditions set forth herein,
approved this Agreement and the transactions contemplated hereby, including the
Merger, and the Boards of Directors of the Company and Merger Sub have declared
the Merger advisable on substantially the terms and conditions set forth herein
and fair to, and in the best interests of, their respective stockholders;
WHEREAS, pursuant to the Merger, among other things, and subject to the
terms and conditions of this Agreement, all of the issued and outstanding shares
of stock of the Company shall be converted into the right to receive shares of
common stock, par value $1.00 per share, of Parent (together with any associated
rights to acquire shares of Cumulative Preferred Stock of Parent pursuant to the
Rights Agreement dated as of June 18, 1998, as amended, between Parent and
Xxxxxx Trust and Savings Bank, as Rights Agent) (collectively, "PARENT COMMON
STOCK");
WHEREAS, as an inducement to Parent and Merger Sub to enter into this
Agreement, certain stockholders of the Company have concurrently herewith
entered into (i) voting agreements in the form attached hereto as EXHIBIT A
("VOTING AGREEMENTS") pursuant to which, among other things, such stockholders
have agreed to vote the shares of Company Common Stock (as hereinafter defined)
owned by them in favor of the Merger and (ii) Company Affiliate Agreements in
the form attached hereto as EXHIBIT B ("COMPANY AFFILIATE AGREEMENTS") pursuant
to which, among other things, such stockholders have agreed to refrain from
selling shares of Company Common Stock or Parent Common Stock during a specified
period prior to and following consummation of the Merger;
WHEREAS, as an inducement to Parent and Merger Sub to enter into this
Agreement, the Company has entered into a stock option agreement in the form
attached hereto as EXHIBIT C ("OPTION AGREEMENT") pursuant to which the Company
has granted to Parent an option to purchase from the Company, upon the terms and
conditions described in the Option Agreement, Shares (as hereinafter defined);
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and that this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code;
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a "pooling of interests"; and
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WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger as set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent and Merger Sub hereby
agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and in accordance with the Maryland
General Corporation Law (the "MGCL"), Merger Sub shall be merged with and into
the Company (the "MERGER"). Following the Merger, the Company shall continue as
the surviving corporation (the "SURVIVING CORPORATION") and the separate
corporate existence of Merger Sub shall cease.
SECTION 1.2 Effective Time. Subject to the provisions of this
Agreement, Parent, Merger Sub and the Company shall cause the Merger to be
consummated by filing appropriate Articles of Merger (the "ARTICLES OF MERGER")
for record with the State Department of Assessments and Taxation of Maryland
(THE "DEPARTMENT") in such form as required by, and executed in accordance with,
the relevant provisions of the MGCL, as soon as practicable on or after the
Closing Date (as hereinafter defined). The Merger shall become effective upon
acceptance for record of such Articles of Merger by the Department or at such
time thereafter (but not exceeding 30 days after such acceptance for record) as
is provided in the Articles of Merger (the "EFFECTIVE TIME").
SECTION 1.3 Closing of the Merger. The closing of the Merger (the
"CLOSING") will take place at a time and on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Article VII
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, or at such other time, date or place as agreed to in writing by the
parties hereto.
SECTION 1.4 Effects of the Merger. The Merger shall have the effects
set forth in the MGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all of the properties, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5 Charter and Bylaws. Effective immediately following the
Merger, the charter of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the charter of the Surviving Corporation until amended
in accordance with applicable Law (as hereinafter defined). Effective
immediately following the Merger, the bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation until amended in accordance with applicable Law.
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SECTION 1.6 Directors. The directors of Merger Sub immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation
and shall hold office from the Effective Time in accordance with the charter and
bylaws of the Surviving Corporation until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
SECTION 1.7 Officers. The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office from the Effective Time in accordance with the charter and
bylaws of the Surviving Corporation until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.1 Conversion of Shares.
(a) At the Effective Time, each issued and outstanding share of the
common stock, par value $.01 per share, of Merger Sub shall, by virtue of the
Merger and without any action on the part of Parent, Merger Sub or the Company,
be converted into one fully paid and non-assessable share of common stock of the
Surviving Corporation.
(b) At the Effective Time, each share of common stock, par value $.01
per share, of the Company, including the associated Rights (as hereinafter
defined) ("COMPANY COMMON STOCK"), issued and outstanding immediately prior to
the Effective Time (individually, a "SHARE" and collectively, the "SHARES")
(other than (i) Shares held by the Company and (ii) Shares held by Parent or
Merger Sub) shall, by virtue of the Merger and without any action on the part of
Parent, Merger Sub, the Company or any holder thereof, be converted into and be
exchangeable for the right to receive the number (rounded to the nearest
thousandth) of fully paid and non-assessable shares of Parent Common Stock,
determined by dividing $38.60 (the "COMPANY COMMON STOCK PRICE") by the Average
Parent Stock Price (such quotient being hereinafter referred to as the "EXCHANGE
RATIO," and all such shares of Parent Common Stock issued pursuant to this
Section 2.1(b), together with any cash in lieu of fractional shares of Parent
Common Stock to be paid pursuant to Section 2.7, being referred to herein as the
"SHARE CONSIDERATION"). As used herein, the "AVERAGE PARENT STOCK PRICE" means
the average of the daily high and low sales prices, regular way, of one share of
Parent Common Stock (rounded to the nearest thousandth) on the New York Stock
Exchange ("NYSE") (as reported in the New York City edition of the Wall Street
Journal or, if not reported thereby, another nationally recognized source)
during the 20 consecutive trading day period ending on the second trading day
prior to the Effective Time; provided, however, that (i) if the Average Parent
Stock Price is less than $133.70 the Average Parent Stock Price for purposes of
determining the Exchange Ratio shall be equal to $133.70 (the "MINIMUM AVERAGE
PARENT STOCK PRICE"), and (ii) if the Average Parent Stock Price is greater than
$153.70, the Average Parent Stock Price for purposes
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of determining the Exchange Ratio shall be equal to $153.70 (the "MAXIMUM
AVERAGE PARENT STOCK PRICE").
(c) At the Effective Time (i) each Share of Company Common Stock owned
by Parent shall be contributed to Merger Sub immediately prior to the Effective
Time and (ii) all shares held by Merger Sub, including any shares so
contributed, shall become one share of authorized but unissued stock of the
Surviving Corporation.
(d) If between the date of this Agreement and the Effective Time Parent
changes (or establishes a record date for changing) the outstanding shares of
Parent Common Stock into a different number of shares or a different class of
shares as a result of any stock dividend, subdivision, reclassification,
recapitalization, split (including a reverse split), combination, exchange of
shares or extraordinary dividend (in cash or otherwise), or any similar event,
then the Minimum Average Parent Stock Price, the Maximum Average Parent Stock
Price and the Exchange Ratio and the Average Parent Stock Price shall be
appropriately adjusted to the extent necessary to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, extraordinary dividend or such similar event.
SECTION 2.2 Stock Options.
(a) As soon as practicable following the date of this Agreement, Parent
and the Company (or, if appropriate, any committee of the Board of Directors of
the Company administering the Company's 1999 Equity Incentive Plan (the "COMPANY
OPTION PLAN") or any committee of the Board of Directors administering Parent's
option plans) or any other Company stock option plans shall take such action as
may be required to effect the following provisions of this Section 2.2. As of
the Effective Time, each option to purchase shares of Company Common Stock,
including all options granted pursuant to the Company Option Plan, the Company's
1983 Stock Option Plan, 1986 Non-Employee Director Option Plan and 1992 Employee
Stock Option Plan (each, a "COMPANY STOCK OPTION") which is then outstanding
shall be assumed by Parent and converted into an option (or a new substitute
option shall be granted) (an "ASSUMED STOCK OPTION") to purchase the number of
shares of Parent Common Stock (rounded up to the nearest whole share) equal to
(x) the number of shares subject to such option multiplied by (y) the Exchange
Ratio, at an exercise price per share of Parent Common Stock (rounded down to
the nearest xxxxx) equal to (A) the former exercise price per share of Company
Common Stock under such option immediately prior to the Effective Time divided
by (B) the Exchange Ratio; provided, however, that in the case of any Company
Stock Option to which Section 421 of the Code applies by reason of its
qualification under Section 422 of the Code, the conversion formula shall be
adjusted, if necessary, to comply with Section 424(a) of the Code. Except as
provided above, each Assumed Stock Option shall be subject to the same terms and
conditions (including expiration date and vesting) as were applicable to such
converted Company Stock Option immediately prior to the Effective Time. Parent
shall use its reasonable best efforts to promptly prepare and file with the
Securities and Exchange Commission (the "SEC") a registration statement on Form
S-8 or other appropriate form with respect to shares of Parent Common Stock
subject to the Assumed Stock Options and to maintain the effectiveness of such
registration statement or registration statements covering such Assumed Stock
Options (and
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maintain the current status of the prospectus or prospectuses contained therein)
for so long as such Assumed Stock Options remain outstanding.
(b) Prior to Closing, the Company shall provide all information
reasonably requested by Parent in respect of the Company Stock Options and shall
fully cooperate with Parent to effect the transactions contemplated by this
Section 2.2.
(c) No later than July 30, 1999, the Company shall terminate any
offerings under its 1999 Employee Stock Purchase Plan (the "STOCK PURCHASE
PLAN"), and such plan shall terminate immediately prior to the Effective Time.
(d) As of the Effective Time, any restricted shares of Company Common
Stock shall be converted into shares of Parent Common Stock equal to the number
of restricted shares of Company Common Stock multiplied by the Exchange Ratio
(and rounded up to the nearest whole share), and such shares of Parent Common
Stock shall otherwise be subject to the same terms as in effect immediately
prior to the Effective Time (including any terms that would result in the
restrictions on such shares lapsing as of the Effective Time as disclosed in
Section 3.13(a) of the Company Disclosure Schedule (as hereinafter defined)). As
of the Effective Time, any stock appreciation rights ("SAR") with respect to
shares of Company Common Stock which are outstanding as of the Effective Time
shall be converted into stock appreciation rights with respect to the number of
shares of Parent Common Stock equal to: (x) the number of shares subject to such
SAR multiplied by (y) the Exchange Ratio, at a strike price per share of Parent
Common Stock (rounded down to the nearest xxxxx) equal to (A) the former strike
price per share of Company Common Stock under such option immediately prior to
the Effective Time divided by (B) the Exchange Ratio.
(e) The Company Option Plan (including all predecessor plans) and all
Company Stock Options shall terminate (other than with respect to the right to
receive the consideration specified in this Section 2.2) at and as of the
Effective Time. The provisions in any other plan, program or arrangement
providing for the issuance or grant of any Company Stock Options or similar
instruments shall be canceled at and as of the Effective Time (subject only to
the rights to receive the consideration, if any, specified in this Section 2.2).
The Company shall take all action necessary to ensure that following the
Effective Time no participant in the Company Option Plan, the Stock Purchase
Plan or other plans, programs or arrangements shall have any right thereunder to
acquire equity securities of the Company, the Surviving Corporation or any
subsidiary thereof and to terminate all such plans, programs and arrangements.
SECTION 2.3 Exchange Fund. Prior to the Effective Time, Parent shall
appoint a commercial bank or trust company reasonably acceptable to the Company
to act as exchange agent hereunder for the purpose of exchanging Shares for the
Share Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Time,
Parent shall deposit with the Exchange Agent, in trust for the benefit of
holders of Shares, certificates representing the Parent Common Stock issuable
pursuant to Section 2.1 in exchange for outstanding Shares. Parent agrees to
make available to the Exchange Agent from time to time as needed, sufficient
cash amounts payable in lieu of fractional shares of Parent Common Stock
pursuant to Section 2.7 and any dividends and other distributions payable
pursuant to Section 2.5. Any cash and certificates of
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Parent Common Stock, together with any dividends or distributions with respect
thereto, deposited with the Exchange Agent shall hereinafter be referred to as
the "EXCHANGE FUND."
SECTION 2.4 Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Shares (the "CERTIFICATES")
whose shares were converted pursuant to Section 2.1(b) into Parent Common Stock
(i) a letter of transmittal which shall specify that delivery shall be
effective, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent, and which letter shall be in
customary form and have such other provisions as Parent and the Company may
reasonably specify; and (ii) instructions for effecting the surrender of such
Certificates in exchange for the Share Consideration. Upon surrender of a
Certificate to the Exchange Agent together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and such
other documents as may reasonably be required by the Exchange Agent, the holder
of such Certificate shall be entitled to receive in exchange therefor (A) a
certificate or certificates representing that number of shares of Parent Common
Stock representing, in the aggregate, the whole number of shares that such
holder has the right to receive pursuant to Section 2.1 and (B) a check in the
amount equal to the cash that such holder has the right to receive pursuant to
the provisions of this Article II, including cash in lieu of any dividends and
other distributions made in accordance with Section 2.5 and cash in lieu of
fractional shares pursuant to Section 2.7 and the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or will accrue on any
cash payable pursuant to Section 2.5 or Section 2.7. In the event of a transfer
of ownership of Company Common Stock which is not registered in the transfer
records of the Company, certificates evidencing, in the aggregate, the proper
number of shares of Parent Common Stock, a check in the proper amount of cash in
lieu of any fractional shares of Parent Common Stock pursuant to Section 2.7 and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.5, may be issued with respect to such Shares to such a transferee
if the Certificate representing such Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer Taxes have been paid.
SECTION 2.5 Distributions with Respect to Unsurrendered Certificates.
No dividends or other distributions declared or made with respect to shares of
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock that such holder would be entitled to receive upon surrender of
such Certificate and no cash payment in lieu of fractional shares of Parent
Common Stock shall be paid to any such holder pursuant to Section 2.7 until such
holder shall surrender such Certificate in accordance with Section 2.4. Subject
to the effect of applicable Laws, following surrender of any such Certificate,
there shall be paid to such holder of shares of Parent Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.7 and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (b) at the appropriate payment date,
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the amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such shares of Parent Common Stock.
SECTION 2.6 No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock issued and cash paid upon conversion of the Shares
in accordance with the terms of Article I and this Article II (including any
cash paid pursuant to Sections 2.5 and 2.7) shall be deemed to have been issued
or paid in full satisfaction of all rights under the MGCL pertaining to the
Shares.
SECTION 2.7 No Fractional Shares of Parent Common Stock.
(a) No certificates or scrip of shares of Parent Common Stock
representing fractional shares of Parent Common Stock or book-entry credit of
the same shall be issued upon the surrender for exchange of Certificates and
such fractional share interests will not entitle the owner thereof to vote or to
have any rights of a stockholder of Parent or a holder of shares of Parent
Common Stock.
(b) Notwithstanding any other provision of this Agreement, each holder
of Shares exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Parent Common Stock (after taking
into account all Certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to the product of (i) such
fractional part of a share of Parent Common Stock multiplied by (ii) the closing
price on the NYSE (as reported in the New York City edition of the Wall Street
Journal or, if not reported thereby, another nationally recognized source) for a
share of Parent Common Stock on the date of the Effective Time. As promptly as
practicable after the determination of the aggregate amount of cash to be paid
to holders of fractional interests, the Exchange Agent shall notify Parent and
Parent shall cause the Surviving Corporation to deposit such amount with the
Exchange Agent and shall cause the Exchange Agent to forward payments to such
holders of fractional interests subject to and in accordance with the terms
hereof.
SECTION 2.8 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for twelve
months after the Effective Time shall be delivered to the Surviving Corporation
or otherwise on the instruction of the Surviving Corporation, and any holders of
the Certificates who have not theretofore complied with this Article II shall
thereafter look only to the Surviving Corporation and Parent for the Share
Consideration with respect to the Shares formerly represented thereby to which
such holders are entitled pursuant to Section 2.1 and Section 2.4, any cash in
lieu of fractional shares of Parent Common Stock to which such holders are
entitled pursuant to Section 2.7 and any dividends or distributions with respect
to shares of parent Common Stock to which such holders are entitled pursuant to
Section 2.5.
SECTION 2.9 No Liability. None of Parent, Merger Sub, the Company, the
Surviving Corporation or the Exchange Agent, or any directors, officers,
employees or agents of each of the foregoing shall be liable to any person in
respect of any Parent Common Stock, any dividends or distributions with respect
thereto, any cash in lieu of fractional shares of Parent
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Common Stock or any cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law.
SECTION 2.10 Investment of the 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 promptly
shall be paid to Parent.
SECTION 2.11 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Share Consideration with respect to the Shares
formerly represented thereby, any cash in lieu of fractional shares of Parent
Common Stock and unpaid dividends and distributions on shares of Parent Common
Stock deliverable in respect thereof, pursuant to this Agreement.
SECTION 2.12 Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the Share Consideration
otherwise payable pursuant to this Agreement to any holder of Shares such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code and the rules and regulations promulgated
thereunder, or any applicable Law. To the extent that amounts are so withheld by
the Surviving Corporation or Parent, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect to which such deduction and withholding was made
by the Surviving Corporation or Parent, as the case may be.
SECTION 2.13 Stock Transfer Books. The stock transfer books of the
Company shall be closed immediately upon the Effective Time and there shall be
no further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Parent for any reason shall be converted into the Share
Consideration with respect to the Shares formerly represented thereby, any cash
in lieu of fractional shares of Parent Common Stock to which the holders thereof
are entitled pursuant to Section 2.7 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 2.5 and the
Certificates so presented shall be cancelled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the Company
to Parent prior to the execution of this Agreement (the "COMPANY DISCLOSURE
SCHEDULE") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein), the
Company hereby represents and warrants to each of Parent and Merger Sub as
follows:
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SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) The Company and each of its subsidiaries is a corporation or legal
entity duly organized, validly existing and in good standing under the
applicable Laws of the jurisdiction of its incorporation or organization and has
all requisite corporate, partnership or similar power and authority to own,
lease and operate its properties and to carry on its businesses as now being
conducted.
(b) Section 3.1 of the Company Disclosure Schedule sets forth a list of
all subsidiaries of the Company. Except as listed in Section 3.1 of the Company
Disclosure Schedule, the Company does not own, directly or indirectly,
beneficially or of record, any shares of capital stock or other securities of
any other entity or any other investment in any other entity.
(c) Each of the Company and its subsidiaries is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased, or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing is not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole.
(d) The Company has heretofore delivered to Parent accurate and
complete copies of the charter or articles or certificate of incorporation and
bylaws (or other similar organizational and governing documents), as currently
in effect, of the Company and each of its subsidiaries.
SECTION 3.2 Capitalization of the Company and Its Subsidiaries.
(a) The authorized stock of the Company consists of: (i) 60,000,000
shares of Company Common Stock, of which 32,516,383 shares were issued and
outstanding as of July 13, 1999, and (ii) 1,000,000 shares of Preferred Stock,
par value $.01 per share, of which 300,000 shares are designated as Series A
Junior Participating Preferred Stock, no shares of which are outstanding. All of
the issued and outstanding Shares have been validly issued, and are duly
authorized, fully paid, non-assessable and free of preemptive rights. As of the
date hereof, 6,260,252 Shares are reserved for issuance and issuable upon or
otherwise deliverable in connection with the exercise of outstanding Company
Stock Options. Except as set forth above and except for the Option Agreement and
the Company Rights Agreement (as hereinafter defined), as of the date hereof,
there are outstanding (i) no shares of stock or other voting securities of the
Company; (ii) no securities of the Company or any of its subsidiaries
convertible into or exchangeable for shares of stock or voting securities of the
Company; (iii) no options or other rights to acquire from the Company or any of
its subsidiaries, and no obligations of the Company or any of its subsidiaries
to issue, any stock, voting securities, or securities convertible into or
exchangeable for stock or voting securities of the Company; and (iv) no equity
equivalents, interests in the ownership or earnings of the Company, or other
similar rights (including stock appreciation rights) (collectively, "COMPANY
SECURITIES"). Except for the Option Agreement, there are no outstanding
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities. There are no stockholder agreements,
voting trusts or other agreements or understandings to which the
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Company or any of its subsidiaries is a party or to which it is bound relating
to the voting of any shares of capital stock of the Company (other than the
Voting Agreement). Section 3.2 of the Company Disclosure Schedule sets forth
information regarding the current exercise price, the date of grant, and the
number of Company Stock Options granted for each holder thereof.
(b) All of the outstanding capital stock of the Company's subsidiaries
is owned by the Company, directly or indirectly, free and clear of any Lien or
any other limitation or restriction (including, any restriction on the right to
vote or sell the same) except as may be provided as a matter of Law. There are
no securities of the Company or its subsidiaries convertible into or
exchangeable for, no options or other rights to acquire from the Company or its
subsidiaries, and no other contract, understanding, arrangement, or obligation
(whether or not contingent) providing for the issuance or sale, directly or
indirectly of, any capital stock or other ownership interests in, or any other
securities of, any subsidiary of the Company. There are no outstanding
contractual obligations of the Company or its subsidiaries to repurchase,
redeem, or otherwise acquire any outstanding shares of capital stock or other
ownership interests in any subsidiary of the Company. For purposes of this
Agreement, "LIEN" means, in respect of any asset (including any security) any
mortgage, lien, pledge, charge, security interest, or encumbrance of any kind in
respect of such asset.
SECTION 3.3 Authority Relative to This Agreement.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and the Option Agreement and to consummate
the transactions contemplated hereby. No other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby and thereby (other than, in respect of the
Merger and this Agreement, the Company Requisite Vote (as hereinafter defined)).
This Agreement and the Option Agreement have been duly and validly executed and
delivered by the Company and constitute valid, legal, and binding agreements of
the Company, enforceable against the Company in accordance with their respective
terms.
(b) As of the date hereof, the Board of Directors of the Company (the
"COMPANY BOARD") has, by unanimous vote of those present (who constituted 100%
of the directors then in office), duly and validly authorized the execution and
delivery of this Agreement and the Option Agreement and approved the
consummation of the transactions contemplated hereby and thereby, taken all
corporate actions required to be taken by the Company Board for the consummation
of the transactions, including the Merger, contemplated hereby and has resolved
(i) this Agreement and the transactions contemplated hereby, including the
Merger, taken together, to be advisable and fair to, and in the best interests
of, the Company and its stockholders; and (ii) to recommend that the
stockholders of the Company approve and adopt the Merger on substantially the
terms and conditions set forth in this Agreement. The Company Board has directed
that the Merger on substantially the terms and conditions set forth in this
Agreement be submitted to the stockholders of the Company for their approval.
The affirmative approval of the holders of Shares representing 66 2/3% of the
votes that may be cast by the holders of all outstanding Shares (voting as a
single class) as of the record date for the Company (the "COMPANY REQUISITE
Vote"), are the only votes of the holders of any class or series of
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stock of the Company necessary to approve the Merger on substantially the terms
and conditions set forth in this Agreement.
SECTION 3.4 SEC Reports; Financial Statements. The Company has filed
all required forms, reports and documents with SEC since February 1, 1997, each
of which complied in all material respects with all applicable requirements of
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), each as in effect on the dates such forms, reports, and
documents were filed. The Company has heretofore delivered or made available to
Parent, in the form filed with the SEC (including, any amendments thereto), (i)
its Annual Report on Form 10-K for each of the fiscal years ended January 31,
1997, 1998 and 1999; (ii) all definitive proxy statements relating to the
Company's meetings of stockholders (whether annual or special) held since
February 1, 1997; and (iii) all other reports (including, all Forms 10-Q filed
since February 1, 1997) or registration statements filed by the Company with the
SEC since February 1, 1997 (the "COMPANY SEC REPORTS"). None of the Company SEC
Reports contained, when filed, any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the Company SEC
Reports complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC in respect
thereof and fairly presented, in conformity with generally accepted accounting
principles applied on a consistent basis ("GAAP") (except as may be indicated in
the notes thereto), the consolidated financial position of the Company and its
consolidated subsidiaries, in each case as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of the unaudited interim financial statements, to normal
year-end adjustments). For purposes of this Agreement, "COMPANY BALANCE SHEET"
means the consolidated balance sheet of the Company as of May 1, 1999, as set
forth in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended May 1, 1999, and "COMPANY BALANCE SHEET DATE" means May 1, 1999. Since May
1, 1999, there has not been any change, or any application or request for any
change, by the Company or any of its subsidiaries in accounting principles,
methods or policies for financial accounting or Tax purposes (subject, in the
case of the unaudited interim financial statements, to normal year-end
adjustments).
SECTION 3.5 No Undisclosed Liabilities. There are no liabilities of the
Company or any of its subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise which are required
to be reflected in its financial statements (or in the notes thereto) in
accordance with GAAP, other than: (a) liabilities disclosed, provided for or
reserved against in the Company Balance Sheet or in the notes thereto; (b)
liabilities arising in the ordinary course of business after the date of the
Company Balance Sheet; (c) liabilities disclosed in the Company SEC Reports
prior to the date hereof; and (d) liabilities under this Agreement.
SECTION 3.6 Absence of Changes. Except as contemplated by this
Agreement and except as and to the extent publicly disclosed in the Company SEC
Reports prior to the date hereof, since the Company Balance Sheet Date, the
Company and its subsidiaries have
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conducted their business in the ordinary and usual course consistent with past
practice and there has not been:
(a) any event, occurrence or development which is reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company and its subsidiaries taken as a whole;
(b) any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of stock of the Company or any
subsidiary, or any repurchase, redemption or other acquisition by the
Company or any of its subsidiaries of any Company or subsidiary securities;
(c) any amendment of any term of any outstanding security of the
Company or any of its subsidiaries that would materially increase the
obligations of the Company or any such subsidiary under such security;
(d) (i) any incurrence or assumption by the Company or any subsidiary
of any indebtedness for borrowed money other than under existing credit
facilities (or any renewals, replacements or extensions that do not
increase the aggregate commitments thereunder) except (A) in the ordinary
and usual course of business consistent with past practice or (B) in
connection with any acquisition or capital expenditure permitted by Section
5.1, or (ii) any guarantee, endorsement, or other incurrence or assumption
of liability (whether directly, contingently or otherwise) by the Company
or any of its subsidiaries for the obligations of any other person (other
than any wholly owned subsidiary of the Company), other than in the
ordinary and usual course of business consistent with past practice;
(e) any creation or assumption by the Company or any of its
subsidiaries of any Lien on any material asset of the Company or any of its
subsidiaries other than in the ordinary and usual course of business
consistent with past practice;
(f) any making of any loan, advance or capital contribution to or
investment in any person by the Company or any of its subsidiaries other
than (i) any acquisition permitted by Section 5.1, (ii) loans, advances or
capital contributions to or investments in wholly owned subsidiaries of the
Company, (iii) loans or advances to employees of the Company or any of its
subsidiaries or (iv) extensions of credit to customers in the ordinary
course of business consistent with past practice;
(g) (i) any contract or agreement entered into by the Company or any
of its subsidiaries on or prior to the date hereof relating to any material
acquisition or disposition of any assets or business, other than contracts
or agreements in the ordinary and usual course of business consistent with
past practice and those contemplated by this Agreement or (ii) any
modification, amendment, assignment, termination or relinquishment by the
Company or any of its subsidiaries of any contract, license or other right
(including any insurance policy naming it as a beneficiary or a loss
payable payee)
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that is reasonably expected to have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole;
(h) any material change in any method of accounting or accounting
principles or practice by the Company or any of its subsidiaries, except
for any such change required by reason of a change in GAAP;
(i) any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any of its subsidiaries; (ii)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any of its subsidiaries;
(iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements; or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any of its subsidiaries other than, in the case
of clause (iv) only, increases prior to the date hereof in compensation,
bonus or other benefits payable to employees of the Company or any of its
subsidiaries in the ordinary and usual course of business consistent with
past practice or merit increases in salaries of employees at regularly
scheduled times in customary amounts consistent with past practices;
(j) any change or amendment of the contracts, salaries, wages or other
compensation of any officer, director, employee, agent or other similar
representative of the Company or any of its subsidiaries whose annual
compensation exceeds $100,000 other than changes or amendments that do not
and will not result in increases of more than five percent in the salary,
wages or other compensation of any such person;
(k) any adoption, entering into, amendment, alteration or termination
of (partially or completely) any Benefit Plan or Employee Arrangement
except as contemplated by this Agreement or to the extent required by
applicable Law or GAAP;
(l) any entering into of any contract with an officer, director,
employee, agent or other similar representative of the Company or any of
its subsidiaries that is not terminable, without penalty or other
liability, upon not more than 60 calendar days' notice; or
(m) any (i) making or revoking of any material election relating to
Taxes, (ii) settlement or compromise of any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, or (iii) change to any material methods of reporting
income or deductions for federal income tax purposes.
SECTION 3.7 Information Supplied. None of the information supplied or
to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Parent in connection with the issuance of Parent Common Stock as required by
the terms of this Agreement pursuant to the Merger (the "S-4"), at the time the
S-4 is filed with the SEC and at the time it becomes effective under the
Securities Act, will contain any untrue statement of a material fact or omit to
state any
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material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the proxy statement relating to the Company
Stockholder Meeting to be held in connection with the Merger (the "PROXY
STATEMENT") will, at the date mailed to stockholders and at the time of the
Company Stockholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event in respect of the Company, its officers and directors or any of its
subsidiaries should occur which is required to be described in an amendment of,
or a supplement to, the S-4 or the Proxy Statement, the Company shall promptly
so advise Parent and such event shall be so described, and such amendment or
supplement (which Parent shall have a reasonable opportunity to review) shall be
promptly filed with the SEC and, as required by Law, disseminated to the
stockholders of the Company. The Proxy Statement, insofar as it relates to the
Company Stockholder Meeting, will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder. No representation is made under this Section 3.7 with respect to any
statements made or incorporated by reference in the S-4 or the Proxy Statement
based on information supplied by Parent specifically for inclusion or
incorporation by reference therein.
SECTION 3.8 Consents and Approvals. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, state securities or blue sky
Laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), or other Antitrust Law, the filing and acceptance for record of the
Articles of Merger as required by the MGCL, and such other filings, permits,
authorizations, consents and approvals which, if not obtained or made, are not
reasonably expected to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole, no filing with or notice to, and no permit,
authorization, consent or approval of, any court or tribunal or administrative,
governmental or regulatory body, agency or authority, whether domestic or
foreign (a "GOVERNMENTAL ENTITY") is necessary for the execution and delivery by
the Company of this Agreement or the Option Agreement or the consummation by the
Company of the transactions contemplated hereby or thereby. For purposes of this
Agreement, "ANTITRUST LAW" means the Xxxxxxx Act, as amended, the Xxxxxxx Act,
as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other Laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade or
lessening of competition through merger or acquisition.
SECTION 3.9 No Default. Neither the Company nor any of its subsidiaries
is in violation of any term of (i) its charter, certificate or articles of
incorporation or bylaws (or other similar organizational or governing
documents), (ii) any agreement or instrument related to indebtedness for
borrowed money or any other agreement to which it is a party or by which it is
bound, or (iii) any domestic or foreign law, order, writ, injunction, decree,
ordinance, award, stipulation, statute, judicial or administrative doctrine,
rule or regulation entered by a Governmental Entity ("LAW") applicable to the
Company, its subsidiaries or any of their respective assets or properties, the
consequence of which violation is reasonably expected to (A) have, individually
or in the aggregate, a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or (B) prevent or materially delay the performance
of this
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Agreement by the Company. The execution, delivery and performance of this
Agreement and the Option Agreement and the consummation of the transactions
contemplated hereby and thereby will not (A) result in any violation of or
conflict with, constitute a default under (with or without due notice or lapse
of time or both), require any consent, waiver or notice under any term of, or
result in the reduction or loss of any benefit or the creation or acceleration
of any right or obligation (including any termination rights) under, (i) the
charter, certificate of incorporation or bylaws (or other similar organizational
or governing documents) of the Company or any of its subsidiaries, (ii) any
agreement, note, bond, mortgage, indenture, contract, lease, Company Permit or
other obligation or right to which the Company or any of its subsidiaries is a
party or by which any of the assets or properties of the Company or any of its
subsidiaries is bound, or (iii) any applicable Law, except in the case of clause
(ii) and (iii) where any of the foregoing is not reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and
its subsidiaries taken as a whole, or (B) result in the creation of (or impose
any obligation on the Company or any of its subsidiaries to create) any Lien
upon any of the material assets or properties of the Company or any of its
subsidiaries pursuant to any such term.
SECTION 3.10 Real Property.
(a) Except as otherwise set forth on the Company Balance Sheet or in
the Company SEC Reports, Section 3.10 of the Company Disclosure Schedule
identifies the address, general use of, and period of ownership or occupancy of
each of the Company's OWNED FACILITIES, defined as all of the real property
owned in fee as of the date hereof by the Company and its subsidiaries, and the
Company's LEASED FACILITIES, defined as all of the real property the Company and
its subsidiaries use or occupy or have the right to use or occupy, now or in the
future, pursuant to any lease, sublease, or other occupancy agreement. No real
property is owned, leased or used by the Company or its current subsidiaries in
the course of their respective businesses other than the Owned Facilities and
Leased Facilities.
(b) With respect to each Owned Facility and except as set forth on the
Company Balance Sheet or in the SEC Reports:
(i) the Company or its subsidiary has good and marketable title
to Owned Facilities free and clear of all Liens, except (x) Taxes and
general and special assessments not in default and payable without
penalty and interest, and (y) easements, covenants and other
restrictions or imperfections of title that do not materially impair
the current use, occupancy, or value, or the marketability of title of
such Owned Facilities;
(ii) to the Company's knowledge, there are no pending or
threatened condemnation proceedings, lawsuits or administrative
actions relating to any Owned Facility that would materially and
adversely affect the current use, occupancy or value thereof;
(iii) there are no leases, subleases, licenses, concessions or
other agreements, written or oral, granting to any party or parties
the right of use or occupancy of any portion of any Owned Facility;
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(iv) there are no outstanding options or rights of first refusal
to purchase any Owned Facility, or any portion thereof or interest
therein;
(v) there are no parties (other than the Company or its
subsidiaries) in possession of any Owned Facility, other than tenants
under any leases disclosed in Section 3.10 of the Company Disclosure
Schedule who are in possession of space to which they are entitled;
(vi) all facilities located on Owned Facilities are now, and will
be at the time of Closing, in good operating condition and repair, and
structurally sound and free of known defects, with no material
alterations or repairs required thereto (other than ordinary and
routine maintenance and repairs) under applicable Laws, Company
Permits or insurance company requirements. All such Owned Facilities
have been operated and maintained in all material respects in
accordance with applicable Laws and Company Permits. All such Owned
Facilities are supplied with utilities and other services, including
gas, electricity, water, telephone, sanitary sewer and storm sewer,
all of which services are adequate for the uses to which such Owned
Facility is being put.
(c) With respect to each Leased Facility and except as set forth on the
Company Balance Sheet or in the SEC Reports:
(i) the Company has made available to Parent a true, correct, and
complete copy of the lease, sublease or other occupancy agreement for
such Leased Facility (and all modifications, amendments, and
supplements thereto and all side letters to which Company or any of
its subsidiaries is a party affecting the obligations of any party
thereunder) (each such agreement is referred to herein as a "REAL
PROPERTY LEASE");
(ii) to the Company's knowledge, the Company or its subsidiary
has a good and valid leasehold interest in such Leased Facilities,
where the Company or its subsidiaries own fee title to the
improvements thereof, free and clear of all Liens, except (x) Taxes
and general and special assessments not in default and payable without
penalty and interest, and (y) easements, covenants and other
restrictions that do not materially impair the current use, occupancy
or value, or the marketability of the Company's or its subsidiary's
interest in such real property;
(iii) each Real Property Lease constitutes the valid and legally
binding obligation of the parties thereto, enforceable in accordance
with its terms, and is in full force and effect;
(iv) all rent and other sums and charges payable by the Company
or its subsidiary as tenant under the Real Property Lease covering the
Leased Facility are current, no termination event or condition or
uncured default on the part of the tenant or, to the Company's
knowledge, the landlord, exists under any Real Property Lease. No
party to such Real Property Lease has given written notice to the
Company or its
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subsidiary or made a claim in writing against the Company or its
subsidiary in respect of any breach or default thereunder;
(v) neither the Company nor its subsidiary has assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered its
leasehold interest in the Leased Facility; and
(vi) the Company's leased facilities located in Singapore are
now, and will be at the time of Closing, in good operating condition
and repair, and structurally sound and free of known defects, with no
material alterations or repairs required thereto (other than ordinary
and routine maintenance and repairs) under applicable Laws, Company
Permits or insurance company requirements. All such Singapore leased
facilities have been operated and maintained in all material respects
in accordance with applicable Laws and Company Permits. All such
facilities are supplied with utilities and other services, including
gas, electricity, water, telephone, sanitary sewer, and storm sewer,
all of which services are adequate for the uses to which such
facilities are being put.
SECTION 3.11 Litigation. Set forth in Section 3.11 of the Company
Disclosure Schedule is (i) a list, as of the date hereof, of each suit, claim,
action, proceeding or, to the Company's knowledge, investigation pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries or any of their respective assets or properties and (ii) a list of
each such suit, claim, action, proceeding or, to the Company's knowledge,
investigation, settled or otherwise resolved since July 31, 1997. Except as
disclosed in the Company Disclosure Schedule pursuant to clause (i) of the
preceding sentence, there is no other suit, claim, action, proceeding or, to the
Company's knowledge, investigation, pending or, to the Company's knowledge,
threatened which is reasonably expected to have, individually and in the
aggregate, a Material Adverse Effect on the Company and its subsidiaries taken
as a whole. Except as disclosed in Section 3.11 of the Company Disclosure
Schedule, none of the Company or its subsidiaries is subject to any outstanding
order, writ, injunction or decree which is reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. To the Company's knowledge, there is no
action, suit, proceeding or investigation pending or threatened against any
current or former officer, director, employee or agent of the Company or any of
its subsidiaries (in his or her capacity as such) which is reasonably expected
to give rise to a claim for contribution or indemnification against the Company
or any of its subsidiaries. Notwithstanding the foregoing, any shareholder
litigation or litigation by any Governmental Entity, in each case brought or
threatened against the Company or any officer, director, employee or agent of
the Company in respect of this Agreement or the transactions contemplated hereby
shall not be deemed to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole.
SECTION 3.12 Compliance with Applicable Law; Permits. The Company and
its subsidiaries hold all permits, licenses, variances, exemptions, orders, and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "COMPANY PERMITS"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which are not
reasonably expected to have, individually or in the aggregate,
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a Material Adverse Effect on the Company and its subsidiaries taken as a whole.
The Company and its subsidiaries are in compliance with the terms of the Company
Permits, except where the failure to comply is not reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. The businesses and operations of the Company
and its subsidiaries comply in all respects with all Laws applicable to the
Company or its subsidiaries, except where the failure to so comply is not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole. To the
Company's knowledge, no investigation or review by any Governmental Entity in
respect of the Company or its subsidiaries is pending or threatened, nor, to the
Company's knowledge, has any Governmental Entity indicated an intention to
conduct the same; provided that for purposes of this Section 3.12 any such
investigation or review arising after the date hereof shall not be deemed to
have a Material Adverse Effect on the Company and its subsidiaries taken as a
whole if and to the extent such investigation or review (or any relevant part
thereof) is based on this Agreement or the transactions contemplated hereby.
SECTION 3.13 Employee Plans.
Section 3.13(a) of the Company Disclosure Schedule sets forth a true,
correct, and complete list of:
(i) all "employee benefit plans," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which the Company or any of its subsidiaries has any
obligation or liability, contingent or otherwise (the "BENEFIT
PLANS"); and
(ii) all employment, consulting, termination, severance, change
of control, individual compensation or indemnification agreements, and
all bonus or other incentive compensation, deferred compensation,
salary continuation, disability, severance, stock award, stock option,
stock purchase, educational assistance, legal assistance, club
membership, employee discount, employee loan, credit union or vacation
agreements, policies or arrangements under which the Company or any of
its subsidiaries has any obligation or liability (contingent or
otherwise) (the "EMPLOYEE ARRANGEMENTS").
(b) In respect of each Benefit Plan and Employee Arrangement, a
complete and correct copy of each of the following documents (if applicable) has
been provided to Parent, except in the case of foreign Benefit Plans and foreign
Employee Arrangements (which shall be provided as soon as practicable after the
date hereof, but in no event later than ten days after the date hereof): (i) the
most recent plan and related trust documents, and all amendments thereto; (ii)
the most recent summary plan description, and all related summaries of material
modifications thereto; (iii) the most recent Form 5500 (including, schedules and
attachments); (iv) the most recent Internal Revenue Service ("IRS")
determination letter; (v) the forms of stock option grant agreements used to
make grants under the Company Option Plans; (vi) each written employment,
consulting or individual severance or other compensation agreement, and all
amendments thereto; and (vii) the most recent actuarial reports (including for
purposes of Financial Accounting Standards Board report nos. 87, 106 and 112).
The Company has provided
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to Parent a true, correct and complete summary of the employee payroll deduction
elections in effect as of the date hereof in respect of its stock purchase
plans, together with the term of the current offering period and applicable
purchase price at the beginning of such period.
(c) None of the Benefit Plans or Employee Arrangements is subject to
Title IV of ERISA, constitutes a defined benefit retirement plan or is a
multi-employer plan described in Section 3(37) of ERISA, and the Company and its
subsidiaries do not have any obligation or liability (contingent or otherwise)
in respect of any such plans. The Company and its subsidiaries are not members
of a group of trades or businesses (other than that consisting of the Company
and its subsidiaries) under common control or treated as a single employer
pursuant to Section 414 of the Code.
(d) The Benefit Plans and their related trusts intended to qualify
under Sections 401 and 501(a) of the Code, respectively, so qualify. Any
voluntary employee benefit association which provides benefits to current or
former employees of the Company and its subsidiaries, or their beneficiaries, is
and has been qualified under Section 501(c)(9) of the Code.
(e) All contributions or other payments required to have been made by
the Company and its subsidiaries to or under any Benefit Plan or Employee
Arrangement by applicable Law or the terms of such Benefit Plan or Employee
Arrangement (or any agreement relating thereto) have been timely and properly
made.
(f) The Benefit Plans and Employee Arrangements have been maintained
and administered in all material respects in accordance with their terms and
applicable Laws. In particular, no individual who has performed services for the
Company or any of its subsidiaries has been improperly excluded from
participation in any Benefit Plan or Employee Arrangement.
(g) There are no pending or, to the Company's knowledge, threatened
actions, claims, or proceedings against or relating to any Benefit Plan or
Employee Arrangement (other than routine benefit claims by persons entitled to
benefits thereunder), and, to the knowledge of the Company, there are no facts
or circumstances which could form a reasonable basis for any of the foregoing.
(h) The Company and its subsidiaries do not have any obligation or
liability (contingent or otherwise) to provide post-retirement life insurance or
health benefits coverage for current or former officers, directors, or employees
of the Company or any of its subsidiaries except (i) as may be required under
Part 6 of Title I of ERISA at the sole expense of the participant or the
participant's beneficiary, (ii) a medical expense reimbursement account plan
pursuant to Section 125 of the Code, or (iii) through the last day of the
calendar month in which the participant terminates employment with the Company
or any subsidiary of the Company.
(i) None of the assets of any Benefit Plan is stock of the Company or
any of its affiliates, or property leased to or jointly owned by the Company or
any of its affiliates.
(j) Except as disclosed in Section 3.13(j) of the Company Disclosure
Schedule or in connection with equity compensation, neither the execution and
delivery of this Agreement nor
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the consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee (current, former, or retired) of the
Company or any of its subsidiaries, (ii) increase any benefits under any Benefit
Plan or Employee Arrangement, or (iii) result in the acceleration of the time of
payment of, vesting of, or other rights in respect of any such benefits.
(k) Each of the Benefit Plans covering employees outside of the United
States is fully funded through adequate reserves on financial statements of the
Company or its subsidiaries, insurance contracts, annuity contracts, trust funds
or similar arrangements, except where any failure to be so funded, either
individually or in the aggregate, does not exceed $2,500,000. The benefits and
compensation under the Benefit Plans and Employee Arrangements covering
employees outside of the United States are no more than customary and reasonable
for the country in which such employees work and the industry in which the
Company and its subsidiaries conduct their business.
(l) No employee of the Company or its subsidiaries has any outstanding
option under the Company's 1999 Employee Stock Purchase Plan to purchase stock.
SECTION 3.14 Labor Matters.
(a) The Company and its subsidiaries are not a party to any labor or
collective bargaining agreement, and no employees of the Company or any of its
subsidiaries are represented by any labor organization. Within the preceding
three years, there have been no representation or certification proceedings, or
petitions seeking a representation proceeding, pending or, to the Company's
knowledge, threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority. Within the
preceding three years, to the Company's knowledge, there have been no organizing
activities involving the Company or any of its subsidiaries in respect of any
group of employees of the Company or any of its subsidiaries.
(b) There are no strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances or other material labor disputes pending or
threatened in writing against or involving the Company or any of its
subsidiaries. There are no unfair labor practice charges, grievances or
complaints pending or, to the Company's knowledge, threatened in writing by or
on behalf of any employee or group of employees of the Company or any of its
subsidiaries which, if individually or collectively resolved against the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole, and, to the
knowledge of the Company, there are no facts or circumstances which could form a
reasonable basis for any of the foregoing.
(c) There are no complaints, charges or claims against the Company or
any of its subsidiaries pending or, to the Company's knowledge, threatened to be
brought or filed with any Governmental Entity or arbitrator based on, arising
out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by the Company or any of its
subsidiaries which, if individually or collectively resolved against the Company
or any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect on the
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Company and its subsidiaries taken as a whole, and, to the knowledge of the
Company, there are no facts or circumstances which could form a reasonable basis
for any of the foregoing.
(d) There has been no "mass layoff" or "plant closing" as defined by
the Worker Adjustment and Retraining Notification Act, as amended ("WARN") in
respect of the Company or any of its subsidiaries within the six months prior to
the Effective Time.
(e) All employees of the Company and its subsidiaries possess all
applicable passports, visas, permits and other authorizations required by all
applicable immigration or similar Laws to be employed by and to perform services
for and on behalf of the Company and its subsidiaries. The Company and its
subsidiaries, and their employees, have complied in all material respects with
all applicable immigration and similar Laws.
SECTION 3.15 Environmental Matters.
(a) For purposes of this Agreement:
(i) "ENVIRONMENTAL LAW" means all federal, state, local or
foreign Law, or other legal requirement regulating or prohibiting
Releases of Hazardous Materials into the indoor or outdoor
environment, or pertaining to the protection of natural resources or
wildlife, the environment or public and employee health and safety or
pollution or the exposure to Hazardous Materials, including the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA") (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 7401 et seq.), the Atomic Energy Act (42 U.S.C. Section
2014 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.), the Communications Act (47 U.S.C.
Section 151 et seq.), and the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) ("OSHA"), as such laws or other legal
requirements have been and may be amended or supplemented through the
Closing Date;
(ii) "HAZARDOUS MATERIAL" means any substance, material or waste
which is regulated pursuant to any applicable Environmental Law as a
"hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste,"
"contaminant," "toxic waste," "toxic substance," "source material,"
"special nuclear material," "byproduct material," "high-level
radioactive waste," "low-level radioactive waste," "spent nuclear
material" or "radiofrequency" and includes petroleum, petroleum
products and petroleum by-products and waste;
(iii) "RELEASE" means any release, spill, emission, leaking,
pumping, dumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment, or into
or out of any property currently or formerly owned, operated or leased
by the applicable party or its subsidiaries; and
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(iv) "REMEDIAL ACTION" means all actions, including any capital
expenditures, required by a Governmental Entity or required under or
taken pursuant to any Environmental Law, or voluntarily undertaken to
(A) clean up, remove, treat, remediate or address any Hazardous
Materials in the indoor or outdoor environment; (B) prevent the
Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not endanger or threaten to endanger the
public or employee health or welfare or the indoor or outdoor
environment; (C) perform pre-remedial studies and investigations or
post-remedial monitoring and care pertaining or relating to a Release.
(b) Except as set forth in Section 3.15 of the Company Disclosure
Schedule:
(i) The operations of the Company and its subsidiaries have been
and are in material compliance with all Environmental Laws, and the
Company is not aware of any facts, circumstances or conditions, which
without significant capital expenditures, would prevent material
compliance in the future;
(ii) To the Company's knowledge, the Company and its subsidiaries
have obtained all Company Permits, required under applicable
Environmental Laws for the continued operations of their respective
businesses; the Company and its subsidiaries have made all material
filings, reports and notices required under any Environmental Law for
the past and future operations of their respective businesses;
(iii) The Company and its subsidiaries are not subject to any
outstanding written orders or material contracts or agreements with
any Governmental Entity or other person respecting (A) Environmental
Laws, (B) any Remedial Action, (C) any Release or threatened Release
of a Hazardous Material, or (D) an assumption of responsibility for
environmental claims of another person or entity;
(iv) The Company and its subsidiaries have not received any
written communication alleging, in respect of any such party, the
violation of or liability (real or potential) under any Environmental
Law; or requesting, with respect to any such party, information with
respect to an investigation pursuant to CERCLA, or any foreign or
state counterpart thereto, or any other Environmental Law;
(v) To the Company's knowledge, neither the Company nor any of
its subsidiaries has any material contingent liability in connection
with any Remedial Action or the Release of any Hazardous Material
(whether on-site or off-site) or employee or third party exposure to
Hazardous Materials;
(vi) To the Company's knowledge, the operations of the Company
and its subsidiaries involving the generation, transportation,
treatment, storage or disposal of Hazardous Materials are in material
compliance with applicable Environmental Laws and, to the Company's
knowledge, there has been no disposal by the Company or its
subsidiaries of any Hazardous Materials on or in any site listed or
formally proposed to be listed on the National Priorities List
promulgated pursuant to CERCLA or any foreign
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or state remedial priority list promulgated or maintained pursuant to
comparable foreign or state law, except where such disposal would not
reasonably be expected to create a material adverse liability for the
Company;
(vii) To the Company's knowledge, there is not now nor has there
been in the past, on, in or at any Owned Facility, Leased Facility,
Former Facility (defined as all of the real property formerly owned,
leased or used, other than those used solely for office or
administrative purposes, by the Company or any of its current or
former subsidiaries or corporate predecessors in interest at any time
in the past), or any other facility for which the Company or its
subsidiaries has assumed responsibility for environmental claims, any
of the following: (A) any underground storage tanks; (B) landfills,
dumps or surface impoundments; (C) any planned, ongoing or completed
Remedial Action; (D) any asbestos-containing materials; or (E) any
polychlorinated biphenyls;
(viii) There is not now, nor to the Company's knowledge, has
there been in the past, on, in or at any Owned Facility, Leased
Facility, Former Facility, or any other facility for which the Company
or its subsidiaries has assumed responsibility for environmental
claims, any site on or nominated for the National Priority List
promulgated pursuant to CERCLA or any foreign or state remedial
priority list promulgated or published pursuant to any comparable
foreign or state law; and
(ix) No judicial or administrative proceedings are pending
or, to the Company's knowledge, threatened against the Company or its
subsidiaries alleging the violation of or seeking to impose liability
pursuant to any Environmental Law and to the Company's knowledge,
there are no investigations pending or threatened against the Company
or any of its subsidiaries under Environmental Laws.
(c) The Company has made available to Parent copies of all
environmentally related assessments, audits, investigations, or similar reports
(and has provided, upon reasonable specific request, sampling reports) in its
possession or control and which were prepared in the last five years (and has
provided, upon reasonable specific request, earlier information) relating to the
Company or its subsidiaries or any real property currently or formerly owned,
operated or leased by or for the Company or its subsidiaries, including any
Owned Facility, Leased Facility, or Former Facility.
SECTION 3.16 Tax Matters.
(a) The Company and its Subsidiaries have (A) duly filed (or there has
been filed on their behalf) with the appropriate governmental authorities all
Tax Returns (as defined in Section 3.16(g)) required to be filed by them on or
prior to the date hereof, other than those Tax Returns the failure of which to
file would not, individually or in the aggregate, have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole, and such Tax Returns are
true, correct and complete in all material respects, and (B) duly paid in full
or made provision in accordance with generally accepted accounting principles
(or there has been paid or provision
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has been made on their behalf) for the payment of all Taxes (as defined in
Section 3.16(g)) shown to be due with such Tax Returns.
(b) There is no audit, examination, deficiency, refund litigation,
proposed adjustment or matter in controversy with respect to any Taxes due and
owing by the Company or its subsidiaries.
(c) There are no outstanding requests, agreements, consents or waivers
to extend the statutory period of limitations applicable to the assessment of
any Taxes or deficiencies against the Company or any of its subsidiaries, and no
power of attorney granted by either the Company or any of its subsidiaries with
respect to any Taxes is currently in force.
(d) Neither the Company nor any of its subsidiaries is a party to any
agreement providing for the allocation or sharing of Taxes.
(e) There are no liens relating to Taxes not yet due and payable.
(f) Neither the Company nor any of its subsidiaries has any liability
under Treasury Regulation Section 1.1502-6 for U.S. federal income Taxes of any
Person other than the Company and its subsidiaries.
(g) For purposes of this Agreement: (A) "Taxes" means any and all
federal, state, local, foreign or other taxes of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation or
net worth, and taxes or other charges in the nature of excise, withholding, ad
valorem or value added, and (B) "Tax Return" means any return, report or similar
statement (including the attached schedules) required to be filed with respect
to any Tax, including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
(h) To the Company's knowledge, neither the Company nor any of its
subsidiaries has any material income or gain that has been or continues to be
deferred under Regulations Section 1.1502-13 or Regulations Section 1.1502-13T
(or under Regulations Section 1.1502-13, 1.1502-13T, 1.1502-14, or 1.1502-14T,
all as in effect prior to Treasury Decision 8597) and the Company does not have
any material excess loss accounts in a subsidiary under Regulations Section
1.1502-19.
SECTION 3.17 Absence of Questionable Payments. Neither the Company nor
any of its subsidiaries nor, to the Company's knowledge, any director, officer,
agent, employee or other person acting on behalf of the Company or any of its
subsidiaries, has used any corporate or other funds for unlawful contributions,
payments, gifts or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any other domestic or foreign Law. Neither
the Company nor any of its
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subsidiaries nor, to the Company's knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any of its
subsidiaries, has accepted or received any unlawful contributions, payments,
gifts or expenditures.
SECTION 3.18 Material Contracts.
(a) Section 3.18 of the Company Disclosure Schedule sets forth a list
of all Material Contracts. The Company has heretofore made available to Parent
true, correct and complete copies of all written or oral contracts and
agreements (and all amendments, modifications and supplements thereto and all
side letters to which the Company or any of its subsidiaries is a party
affecting the obligations of any party thereunder) to which the Company or any
of its subsidiaries is a party or by which any of its assets or properties are
bound that are of the following type: (i) to the extent material to the
business, assets or properties of the Company and its subsidiaries taken as a
whole, product design or development, or indemnification contracts (including,
any contract to which the Company or any of its subsidiaries is a party
involving employees of the Company); (ii) merchandising or distribution
agreements involving the payment of in excess of $2,500,000 per year; (iii) to
the extent material to the business, assets or properties of the Company and its
subsidiaries taken as a whole, contracts granting a right of first refusal or
first negotiation; (iv) to the extent material to the business, assets or
properties of the Company and its subsidiaries taken as a whole, partnership or
joint venture agreements; (v) agreements for the acquisition, sale or lease of
material assets or properties of the Company (by merger, purchase or sale of
assets or stock or otherwise) entered into since January 1, 1996 involving in
excess of $1,000,000; (vi) to the extent material to the business, assets or
properties of the Company and its subsidiaries taken as a whole, contracts or
agreements with any Governmental Entity; (vii) loan or credit agreements,
mortgages, indentures or other agreements or instruments evidencing indebtedness
for borrowed money by the Company or any of its subsidiaries or any such
agreement pursuant to which indebtedness for borrowed money, in each case
involving in excess of $1,000,000; (viii) to the extent material to the
business, assets or properties of the Company and its subsidiaries taken as a
whole, agreements that purport to limit, curtail or restrict the ability of the
Company or any of its subsidiaries to compete in any geographic area or line of
business; (ix) to the extent material to the business, assets or properties of
the Company and its subsidiaries taken as a whole, foundry, wafer manufacturing
or fabricating agreements, (x) supply or second source agreements involving the
payment of in excess of $2,500,000 per year, (xi) agreements with customers
relating to the sale of products involving the payment of in excess of
$2,500,000 per year and (xii) commitments and agreements to enter into any of
the foregoing (collectively, together with any such contracts entered into in
accordance with Section 5.1, the "MATERIAL CONTRACTS").
(b) Each of the Material Contracts constitutes the valid and legally
binding obligation of the Company or its subsidiaries, enforceable in accordance
with its terms, and is in full force and effect. There is no default under any
Material Contract so listed either by the Company (or its subsidiaries) or, to
the Company's knowledge, by any other party thereto, and no event has occurred
that with the giving of notice, the lapse of time, or both would constitute a
default thereunder by the Company (or its subsidiaries) or, to the Company's
knowledge, any other party.
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(c) No party to any such Material Contract has given notice to the
Company of or made a claim against the Company in respect of any breach or
default thereunder.
SECTION 3.19 Subsidies. Section 3.19 of the Company Disclosure Schedule
sets forth a list of all grants, subsidies and similar arrangements directly or
indirectly between or among the Company or any of its subsidiaries, on the one
hand, and any domestic or foreign Governmental Entity or any other person, on
the other hand. Except as set forth on Section 3.19 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has requested, sought,
applied for or entered into any grant, subsidy or similar arrangement directly
or indirectly from or with any domestic or foreign Governmental Entity or any
other person.
SECTION 3.20 Intellectual Property.
(a) As used herein, the term "SCHEDULED INTELLECTUAL PROPERTY" means
domestic and foreign letters patent, patents, patent applications, exclusive
patent licenses, exclusive know-how licenses, trademark registrations and
applications, service xxxx registrations and applications and copyright
registrations and applications. Section 3.20(a) of the Company Disclosure
Schedule sets forth all right, title and interest of the Company and its
subsidiaries in and to all of the Scheduled Intellectual Property owned or used
by the Company and its subsidiaries and material to the operation of their
respective businesses. Such Scheduled Intellectual Property and the goodwill of
the Company's and its subsidiaries' respective businesses associated therewith,
together with all copyrights, databases, non-exclusive patent licenses, software
licenses, non-exclusive know-how licenses, trade names, trademarks, service
marks, trade secrets, technical knowledge, know-how, confidential information,
customer lists, proprietary processes, techniques, formulae, "semiconductor chip
product" and "mask works" (as such terms are defined in 17 U.S.C. 901), and
related ownership, use and other rights (including rights of renewal and rights
to xxx for past, present and future infringements or misappropriations thereof),
shall be collectively referred to herein as the "INTELLECTUAL PROPERTY."
(b) To the Company's knowledge or the knowledge of those persons who
have Company responsibility for such matters, and except as are not reasonably
expected to have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole; (i) each item of Scheduled Intellectual Property is in
compliance with applicable legal requirements relating to the enforceability or
maintenance of such item (including payment of filing, examination and
maintenance fees and proofs of working or use, as applicable) other than any
requirement that if, not satisfied, would not result in a revocation or
otherwise materially affect the enforceability of the item of Scheduled
Intellectual Property in question, and the Company has taken reasonable steps to
protect the Intellectual Property; (ii) the Company and its subsidiaries own or
have the right to use, free and clear of all Liens, all Intellectual Property
necessary for the operation of the businesses of the Company and its
subsidiaries as presently conducted and as presently proposed to be conducted;
(iii) each material item of Intellectual Property owned or used by the Company
and its subsidiaries immediately prior to the Effective Time will be owned or
available for use by Parent and the Surviving Corporation immediately subsequent
to the Effective Time; (iv) the Company and its subsidiaries have taken all
action deemed by the Company or the relevant subsidiary to be necessary or
reasonable, but in no event less than all commercially reasonable action, to
protect and preserve the confidentiality of all technical Intellectual Property
not
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otherwise protected by patents, patent applications or copyrights; (v) each
employee of the Company and its subsidiaries has executed a non-disclosure
agreement which included an agreement to assign to the Company or its
subsidiaries all rights to Intellectual Property originated or invented by such
employee relating to the business of the Company and its subsidiaries; and (vi)
no trade secret or confidential know-how material to the business of the Company
or any of its subsidiaries as currently operated has been disclosed or
authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that protects the Company's or such subsidiary's
proprietary interests in and to such trade secrets and confidential know-how.
(c) To the Company's knowledge, neither the Company nor any of its
subsidiaries has interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of third parties, and
neither the Company nor any of its subsidiaries has, within the three years
prior to the date of this Agreement, received any charge, complaint, claim or
notice alleging any such interference, infringement, misappropriation or
violation. No third party has, to the Company's knowledge, interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of the Company or its subsidiaries, except where
such actions are not reasonably expected to have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole.
(d) Section 3.20(d) of the Company Disclosure Schedule lists each
license, sublicense, agreement or permission pursuant to which the Company uses
any material item of Scheduled Intellectual Property that any third party owns
and that any of the Company or any of its subsidiaries uses pursuant to license,
sublicense, agreement or permission that either (i) if such license, sublicense,
agreement or permission were denied, would reasonably be expected to have a
Material Adverse Effect on the Company or its Subsidiaries taken as a whole, or
(ii) includes any past due obligation to pay any royalty amount or any
obligation to pay a royalty, whether fixed or determined based on usage,
following the Effective Date.
(e) Except as set forth in Section 3.20(e) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has granted (i) any
exclusive or non-exclusive licenses (other than implied patent licenses in the
ordinary course of business) in any patents owned by the Company or any of its
subsidiaries or (ii) any exclusive licenses in any other Intellectual Property
owned by the Company or any of its subsidiaries to any third party.
(f) Except as may have been given in connection with patent licenses
set forth in Section 3.20(e) of the Company Disclosure Schedule or given in the
ordinary course of business within the scope of the Company's standard terms and
conditions of sale, neither the Company nor any of its subsidiaries has entered
into any agreement to indemnify any other person against any charge of
infringement or misappropriation of any Intellectual Property.
(g) The Company owns or has the right to use all Intellectual Property
incorporated or used in the Company's existing websites.
(h) The execution, delivery and performance by the Company of this
Agreement, and the consummation of the transactions contemplated hereby, will
not (i) result in the loss or
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impairment of, or give rise to any right of any third party to terminate or
alter, any of the Company's or any of its subsidiaries' rights to own any of its
Intellectual Property except as are not unreasonably expected to have a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole, nor (ii)
require the consent of any Governmental Entity or third party in respect of any
such Intellectual Property.
SECTION 3.21 Year 2000.
(a) Based on a comprehensive assessment of the Systems that are used or
relied on by the Company or by any of its subsidiaries in the conduct of their
respective businesses, neither the Company nor any of its subsidiaries knows of
any such System that will malfunction, will cease to function, will generate
incorrect data or will provide incorrect results when processing, providing
and/or receiving (i) date-related data in, into or between the twentieth and
twenty-first centuries or (ii) date-related data in connection with any valid
date in the twentieth or twenty-first centuries.
(b) Based on a comprehensive assessment of the products and services
that are or have been sold, licensed, rendered or otherwise provided or offered
by the Company or by any of its subsidiaries in the conduct of their respective
businesses, neither the Company nor any of its subsidiaries knows of any such
products or services which will malfunction, will cease to function, will
generate incorrect data or will produce incorrect results when processing,
providing or receiving (i) date-related data in, into or between the twentieth
and twenty-first centuries or (ii) date-related data in connection with any
valid date in the twentieth or twenty-first centuries; and, to the knowledge of
the Company or any of its subsidiaries, neither the Company nor any of its
subsidiaries is or will be subject to claims or liabilities arising from any
such malfunction, cessation of function, generation of incorrect data or
production of incorrect results.
(c) Neither the Company nor any of its subsidiaries has made other
representations or warranties regarding the ability of any product or service
that is or has been sold, licensed, rendered or otherwise provided or offered by
the Company or by any of its subsidiaries, or of any of the Systems used or
relied on by the Company or any of its subsidiaries, in the conduct of their
respective businesses to operate without malfunction, to operate without ceasing
to function, to generate correct data or to produce correct results when
processing, providing or receiving (i) date-related data in, into and between
the twentieth and twenty-first centuries or (ii) date-related data in connection
with any valid date in the twentieth and twenty-first centuries.
(d) Based on a comprehensive inquiry of all material suppliers, service
providers and customers of the Company and its subsidiaries, neither the Company
nor any of its subsidiaries knows of any inability on the part of any such
supplier, service provider or customer to timely ensure that its own (and its
material suppliers' and service providers') Systems continue to operate without
malfunction, to operate without ceasing to function, to generate correct data
and to produce correct results when processing, providing and/or receiving (i)
date-related data in, into and between the twentieth and twenty-first centuries
and (ii) date-related data in connection with any valid date in the twentieth
and twenty-first centuries.
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(e) For the purposes of this Agreement, "SYSTEMS" means, with respect
to a person, any and all material hardware, software and firmware used by the
Company or any of its subsidiaries in the course of their respective businesses,
including (i) any and all source and object code; (ii) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise; (iii) billing, reporting and other management
information systems; (iv) all descriptions, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing; (v) all content
contained on any Internet site(s) maintained by such person or any of its
subsidiaries; and (vi) all documentation, including user manuals and training
materials, relating to any of the foregoing.
SECTION 3.22 Opinion of Financial Advisor. Broadview International LLC
(the "FINANCIAL ADVISOR") has delivered to the Company Board its opinion, dated
the date of this Agreement, to the effect that, as of such date, the Exchange
Ratio is fair to the stockholders of the Company from a financial point of view,
and such opinion has not been withdrawn or modified.
SECTION 3.23 Brokers. No broker, finder, investment banker or other
person (other than the Financial Advisor, a true and correct copy of whose
engagement letter has been provided to Parent) is entitled to any brokerage,
finder's or other fee or commission or expense reimbursement in connection with
the transactions contemplated by this Agreement based upon arrangements made by
and on behalf of the Company or any of its affiliates.
SECTION 3.24 Accounting Matters. Neither the Company nor, to the
Company's knowledge, any of its affiliates, has taken or agreed to take any
action or is aware of any fact or circumstance that would prevent the Merger
from qualifying as a "pooling of interests" under APB 16 and the applicable SEC
rules and regulations.
SECTION 3.25 Recalls. There has not been any recall made generally to
customers since December 31, 1998 of any product designed, manufactured,
shipped, sold or otherwise introduced into the stream of commerce by or on
behalf of the Company or any of its past or present subsidiaries ("PRODUCT"),
and (ii) to the Company's knowledge, there are currently no material defects in
design, manufacturing, materials or workmanship which involve any Product that
accounts for a material portion of the Company's sales.
SECTION 3.26 Takeover Statute. The Company has taken all action
required to be taken by it in order to exempt this Agreement, the Option
Agreement and the transactions contemplated hereby and thereby from, and this
Agreement, the Option Agreement and the transactions contemplated hereby and
thereby (the "COVERED TRANSACTIONS") are exempt from, the requirements of any
"moratorium," "control share," "fair price," "affiliate transaction,"
"interested stockholder," "business combination" or other antitakeover Laws of
any state (collectively, "TAKEOVER STATUTES"). Subtitle 6 (Sections 3-601
through 3-603) and Subtitle 7 (Sections 3-701 through 3-709) of the MGCL are not
applicable to the Covered Transactions. Holders of Shares do not have
dissenters' or appraisal rights in connection with the Merger.
SECTION 3.27 Company Rights Agreement. The Company Board has taken all
necessary action (including, any amendment thereof) under the Rights Agreement,
dated as of
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May 2, 1990, between the Company and the First National Bank of Boston, as
Rights Agent (the "COMPANY RIGHTS AGREEMENT"), so that none of the execution or
delivery of this Agreement or the Option Agreement, the exchange of the shares
of Parent Common Stock for the Shares in accordance with Article II, or any
other transaction contemplated hereby or thereby will cause (i) the rights (the
"RIGHTS") issued pursuant to the Company Rights Agreement to become exercisable
under the Company Rights Agreement, (ii) Parent or Merger Sub to be deemed an
"Acquiring Person" (as defined in the Company Rights Agreement), or (iii) the
"Stock Acquisition Date" or "Distribution Date" (each as defined in the Company
Rights Agreement) to occur upon any such event.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered by Parent to
the Company prior to the execution of this Agreement (the "PARENT DISCLOSURE
SCHEDULE") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein), Parent
and Merger Sub hereby represent and warrant to the Company as follows:
SECTION 4.1 Organization.
(a) Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its businesses as now being
conducted.
(b) Each of Parent and Merger Sub is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing is not reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect on Parent and
its subsidiaries taken as a whole.
(c) Parent has heretofore delivered to the Company accurate and
complete copies of the certificate of incorporation and bylaws of Parent and the
charter and bylaws of Merger Sub as currently in effect.
SECTION 4.2 Authority Relative to This Agreement.
(a) Each of Parent and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement and the Option Agreement and to
consummate the transactions contemplated hereby and thereby. No other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize this
Agreement and the Option Agreement or to consummate the transactions
contemplated hereby or thereby. This Agreement and the Option Agreement have
been duly and validly executed and delivered by each of Parent and Merger Sub
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and constitute valid, legal and binding agreements of each of Parent and Merger
Sub, enforceable against each of Parent and Merger Sub in accordance with their
respective terms.
(b) The Board of Directors of Parent (the "PARENT BOARD"), the Board of
Directors of Merger Sub and Parent as the sole stockholder of Merger Sub have
duly and validly authorized the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and taken all corporate
actions required to be taken by such Boards of Directors and Parent as the sole
stockholder of Merger Sub for the consummation of the transactions.
SECTION 4.3 SEC Reports; Financial Statements. Parent has filed all
required forms, reports and documents with the SEC since January 1, 1997, each
of which complied in all material respects with all applicable requirements of
the Securities Act and the Exchange Act, each as in effect on the dates such
forms, reports, and documents were filed. Parent has heretofore delivered or
made available to the Company, in the form filed with the SEC (including, any
amendments thereto), (i) its Annual Report on Form 10-K each of the fiscal years
ended December 31, 1996, 1997 and 1998, (ii) all definitive proxy statements
relating to Parent's meetings of stockholders (whether annual or special) held
since January 1, 1997 and (iii) all other reports or registration statements
filed by Parent with the SEC since January 1, 1997 (the "PARENT SEC REPORTS").
None of the Parent SEC Reports contained, when filed, any untrue statement of a
material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of Parent included in the
Parent SEC Reports complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC in
respect thereof and fairly presented, in conformity with GAAP on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of Parent and its consolidated subsidiaries, in each case as
of the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments). For purposes of this
Agreement "PARENT BALANCE SHEET" means the consolidated balance sheet of Parent
as of March 31, 1999, and "PARENT BALANCE SHEET DATE" means March 31, 1999.
Except as and to the extent disclosed in the Parent SEC Reports, since the
Parent Balance Sheet Date, there has not been any event, occurrence or
development which is reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Parent and its subsidiaries taken as
a whole.
SECTION 4.4 Undisclosed Liabilities. There are no liabilities of Parent
or any of its subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise which are required to be
reflected in its financial statements (or in the notes thereto) in accordance
with GAAP, other than: (a) liabilities disclosed, provided for or reserved
against in the Parent Balance Sheet or in the notes thereto; (b) liabilities
arising in the ordinary course of business after the date of the Parent Balance
Sheet; (c) liabilities disclosed in the Parent SEC Reports prior to the date
hereof and (d) liabilities under this Agreement.
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SECTION 4.5 Capitalization of Parent. The authorized capital stock of
Parent consists of: (i) 500,000,000 shares of Common Stock, par value $1.00 per
share (the "PARENT SHARES"), of which 392,940,778 shares are issued and
outstanding as of July 20, 1999 and 858,938 shares of which are held in Parent's
treasury, and (ii) 10,000,000 shares of Preferred Stock, par value $25.00 per
share, no shares of which are outstanding as of July 20, 1999. All of the issued
and outstanding Parent Shares have been validly issued, and are duly authorized,
fully paid, non-assessable and free of preemptive rights. As of July 23, 1999,
45,800,485 Parent Shares were available for issuance under Parent's option
plans, of which 30,836,160 were issuable upon or otherwise deliverable in
connection with the exercise of options outstanding on such date. Except as set
forth above and except for the Parent Rights Agreement (as hereinafter defined),
as of July 23, 1999, there are outstanding (i) no shares of capital stock or
other voting securities of Parent; (ii) no securities of Parent convertible into
or exchangeable for shares of capital stock or voting securities of Parent;
(iii) no options or other rights to acquire from Parent and no obligations of
Parent to issue, any capital stock, voting securities, or securities convertible
into or exchangeable for capital stock or voting securities of Parent; and (iv)
no equity equivalents, interests in the ownership or earnings of Parent, or
other similar rights (including stock appreciation rights).
SECTION 4.6 Information Supplied. None of the information supplied or
to be supplied by Parent or Merger Sub specifically for inclusion or
incorporation by reference in (i) the S-4 will, at the time the S-4 is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (ii) the Proxy Statement will, at the date mailed to
stockholders of the Company and at the time of the Company Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event in respect of
Parent, its officers and directors, or any of its subsidiaries should occur
which is required to be described in an amendment of, or a supplement to, the
S-4 or the Proxy Statement, Parent shall promptly so advise the Company and such
event shall be so described, and such amendment or supplement (which the Company
shall have a reasonable opportunity to review) shall be promptly filed with the
SEC. The S-4 will comply as to form in all material respects with the provisions
of the Securities Act and the rules and regulations thereunder. No
representation is made under this Section 4.6 with respect to any statements
made or incorporated by reference in the S-4 or the Proxy Statement based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 4.7 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky Laws, the HSR Act, any other Antitrust Law, the filing
and acceptance for record of the Articles of Merger as required by the MGCL, as
otherwise set forth in Section 4.7 to the Parent Disclosure Schedule, and such
other filings, permits, authorizations, consents and approvals which, if not
obtained or made, are not reasonably expected to have a Material Adverse Effect
on Parent and its
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subsidiaries taken as a whole no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery by Parent or Merger Sub of this Agreement or the
Option Agreement or the consummation by Parent or Merger Sub of the transactions
contemplated hereby or thereby. The execution, delivery, and performance of this
Agreement and the Option Agreement by Parent or Merger Sub and the consummation
by Parent or Merger Sub of the transactions contemplated hereby and thereby will
not result in any violation of or conflict with, constitute a default under
(with or without due notice or lapse of time or both), require any consent,
waiver or notice under any term of, or result in the reduction or loss of any
benefit or the creation or acceleration of any right or obligation under, (i)
the respective certificate or articles of incorporation or bylaws of Parent or
the charter and bylaws of Merger Sub, (ii) any agreement, note, bond, mortgage,
indenture, contract, lease, permit or other obligation or right to which Parent
or Merger Sub is a party or by which any of their respective assets or
properties is bound, or (iii) any Law, except in the case of (ii) or (iii) where
any of the foregoing is not reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent and its subsidiaries taken as a
whole.
SECTION 4.8 No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, Merger
Sub has neither incurred any obligation or liability nor engaged in any business
or activity of any type or kind whatsoever or entered into any agreement or
arrangement with any person.
SECTION 4.9 Brokers. No broker, finder, investment banker or other
person (other than Xxxxxx Xxxxxxx & Co.) 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, Merger
Sub or any of their affiliates.
SECTION 4.10 Accounting Matters. Neither Parent nor, to Parent's
knowledge, any of its affiliates, has taken or agreed to take any action or is
aware of any fact or circumstance that would prevent the Merger from qualifying
as a "pooling of interests" under APB 16 and the applicable SEC rules and
regulations.
ARTICLE V
COVENANTS RELATED TO CONDUCT OF BUSINESS
SECTION 5.1 Conduct of Business of the Company. Except as set forth in
Section 5.1 of the Company Disclosure Schedule, as consented to by Parent or as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, the Company will, and will cause each of its subsidiaries to,
conduct its operations in the ordinary and usual course of business consistent
with past practice and use reasonable best efforts to preserve intact its
current business organizations, keep available the service of its current
officers and employees and preserve its relationships with customers, suppliers
and others having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or in Section 5.1 of the Company Disclosure Schedule, prior to the
Effective
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Time, neither the Company nor any of its subsidiaries will, without the prior
written consent of Parent:
(a) amend its charter or bylaws (or other similar organizational
or governing instruments) or amend, modify or terminate the Company
Rights Plan;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any stock of any class or any other securities
convertible into or exchangeable for any stock or any equity
equivalents (including, any stock options or stock appreciation
rights), except for the issuance or sale of Shares pursuant to
outstanding Company Stock Options;
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock; (iii) make any other actual,
constructive or deemed distribution in respect of any shares of its
capital stock or otherwise make any payments to stockholders in their
capacity as such; or (iv) redeem, repurchase or otherwise acquire any
of its securities or any securities of any of its subsidiaries
(including redeeming any Rights);
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than
the Merger);
(e) alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or
ownership of any subsidiary of Company;
(f) (i) incur or assume any long-term or short-term debt or issue
any debt securities, except for borrowings under existing lines of
credit in the ordinary and usual course of business consistent with
past practice and in amounts not material to the Company and its
subsidiaries taken as a whole; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other person, except in the
ordinary and usual course of business consistent with past practice
and in amounts not material to the Company and its subsidiaries, taken
as a whole, and except for obligations of the wholly owned
subsidiaries of the Company; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
the wholly owned subsidiaries of the Company or customary loans or
advances to employees in the ordinary and usual course of business
consistent with past practice and in amounts not material to the maker
of such loan or advance); (iv) pledge or otherwise encumber shares of
capital stock of the Company or its subsidiaries; or (v) mortgage or
pledge any of its material assets, tangible or intangible, or create
or suffer to exist any material Lien thereupon;
(g) (i) except as set forth in Section 5.1(g) of the Company
Disclosure Schedule and as required under existing agreements,
increase in any manner the
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compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in
effect as of the date hereof (including, the granting of stock
appreciation rights or performance units) or grant any completion
bonuses or change of control payments in respect of the Merger or that
will be affected thereby; or (ii) promote or change the
classification or status of, or except in the ordinary course of
business consistent with past practice, hire any employee or
individual;
(h) acquire, sell, lease or dispose of any material assets
outside the ordinary and usual course of business consistent with past
practice or any assets which in the aggregate are material to the
Company and its subsidiaries taken as a whole, or grant any exclusive
distribution rights;
(i) except as may be required as a result of a change in Law or
in GAAP, make any material change in any of the accounting principles
or practices used by it;
(j) revalue in any material respect any of its assets, including,
writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary and usual course of business
consistent with past practice or as required by GAAP;
(k) (i) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization
or division thereof or any equity interest therein; (ii) enter into
any material contract or agreement, other than in the ordinary and
usual course of business consistent with past practice, or amend in
any material respect any of the Material Contracts or the agreements
referred to in Section 3.18; (iii) authorize any new capital
expenditure or expenditures which are not provided for in the
Company's current capital expenditure plan and which, individually, is
in excess of $100,000 or, in the aggregate, are in excess of $250,000;
or (iv) enter into or amend any contract, agreement, commitment or
arrangement providing for the taking of any action that would be
prohibited hereunder;
(l) make or revoke any Tax election, or settle or compromise any
Tax liability, or change (or make a request to any taxing authority to
change) any aspect of its method of accounting for Tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary and usual course of business consistent with past practice or
in accordance with their terms of liabilities reflected or reserved
against in, the consolidated financial statements of the Company and
its subsidiaries or incurred since the date of such financial
statements or 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;
(n) settle or compromise any pending or threatened suit, action
or claim relating to the transactions contemplated hereby;
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(o) take any action (including, any action otherwise permitted by
this Section 5.1) that would prevent or impede the Merger from
qualifying as a "pooling of interests" under APB 16 and the applicable
SEC rules and regulations or as a reorganization under Section 368 of
the Code;
(p) enter into any agreement or arrangement that limits or
otherwise restricts the Company or any of its subsidiaries or any
successor thereto or that could, after the Effective Time, limit or
restrict the Surviving Corporation and its affiliates (including
Parent) or any successor thereto, from engaging or competing in any
line of business or in any geographic area;
(q) fail to comply in any material respect with any Law
applicable to the Company, its subsidiaries, or their respective
assets;
(r) enter into any direct or indirect arrangements for financial
subsidies;
(s) adopt, enter into, amend, alter or terminate (partially or
completely) any Benefit Plan or Employee Arrangement except as
contemplated by this Agreement or to the extent required by applicable
Law;
(t) enter into any contract with an officer, director, employee,
agent or other similar representative of the Company or any of its
subsidiaries that is not terminable, without penalty or other
liability, upon not more than 60 calendar days' notice; or
(u) take, propose to take, or agree in writing or otherwise to
take, any of the actions described in Sections 5.1(a) through 5.1(t)
or any action which would cause the condition set forth in Section
7.2(a) not to be satisfied.
SECTION 5.2 Conduct of Business of Parent. Except as consented to by
the Company or as contemplated by this Agreement, during the period from the
date hereof to the Effective Time, neither Parent nor any of its subsidiaries
will:
(a) amend Parent's certificate of incorporation or bylaws;
(b) take any action that would or would reasonably be expected to
prevent, impair or materially delay the ability of the Company or Parent to
consummate the transactions contemplated by this Agreement;
(c) take any action (including, any action otherwise permitted by this
Section 5.2) that would prevent or impede the Merger from qualifying as a
"pooling of interests" under APB 16 and the applicable SEC rules and regulations
or as a reorganization under Section 368 of the Code; or
(d) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Section 5.2(a) through 5.2(c) or any action
which would cause the condition set forth in Section 7.3(a) not to be satisfied.
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SECTION 5.3 Access to Information.
(a) Between the date hereof and the Effective Time and subject to
applicable Law, the Company will give Parent and Merger Sub and their authorized
representatives (including, counsel, financial advisors, environmental
consultants and auditors) reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of the Company and
its subsidiaries, will permit Parent and Merger Sub to make such inspections as
Parent and Merger Sub may reasonably require, including the right to conduct
sampling of surface water, groundwater, soil and outdoor air quality, and
building materials and will cause the Company's officers and those of its
subsidiaries to furnish Parent and Merger Sub with such financial and operating
data and other information in respect of the business, properties and personnel
of the Company and its subsidiaries as Parent or Merger Sub may from time to
time reasonably request, provided that no investigation pursuant to this Section
5.3(a) shall affect or be deemed to modify any of the representations or
warranties made by the Company.
(b) Between the date hereof and the Effective Time, the Company shall
furnish to Parent and Merger Sub (i) within five business days after the
delivery thereof to management, such monthly financial statements and data as
are regularly prepared for distribution to Company management and (ii) at the
earliest time they are available, such quarterly and annual financial statements
as are prepared for the Company Board, which (in the case of this clause (ii))
shall be in accordance with the books and records of the Company.
(c) Each of Parent and the Company will hold and will cause its
authorized representatives to hold in confidence all documents and information
furnished to the other in connection with the transactions contemplated by this
Agreement pursuant to the terms of that certain Confidentiality Agreement
entered into between the Company and Parent dated May 19, 1999 (the
"CONFIDENTIALITY AGREEMENT").
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Preparation of S-4 and the Proxy Statement. Parent and the
Company will, as promptly as practicable, jointly prepare and file with the SEC
the Proxy Statement in connection with the vote of the stockholders of the
Company in respect of the Merger. Parent will, as promptly as practicable,
prepare, following receipt of notification from the SEC that it has no further
comments on the Proxy Statement, and file with the SEC the S-4 in connection
with the registration under the Securities Act of the shares of Parent Common
Stock issuable upon conversion of the Shares and the other transactions
contemplated hereby. Parent and the Company will, and will cause their
accountants and lawyers to, use their reasonable best efforts to have or cause
the S-4 to be declared effective as promptly as practicable after filing with
the SEC, including, causing their accountants to deliver necessary or required
instruments such as opinions, consents and certificates, and will take any other
action required or necessary to be taken under federal or state securities Laws
or otherwise in connection with the registration process (other than qualifying
to do business in any jurisdiction which it is not now so qualified or filing a
general consent to service of process in any jurisdiction). The Company and
Parent shall, as promptly as practicable after the receipt thereof, provide to
the other party copies of any
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written comments and advise the other party of any oral comments, in respect of
the Proxy Statement or the S-4 received from the staff of the SEC. The Company
will provide Parent with a reasonable opportunity to review and comment on any
amendment or supplement to the Proxy Statement prior to filing with the SEC and
will provide Parent with a copy of all such filings with the SEC. Parent will
provide the Company with a reasonable opportunity to review and comment on any
amendment or supplement on the S-4 prior to filing with SEC and will provide the
Company with a copy of all such filings with the SEC. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the Form
S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Form S-4 or
comments thereon and responses thereto or requests by the SEC for additional
information. The Company will use its reasonable best efforts to cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable date.
SECTION 6.2 Letter of Accountants.
(a) The Company shall use all reasonable best efforts to cause to be
delivered to Parent a letter of Pricewaterhouse Coopers LLP, the Company's
independent auditors, dated as of the date on which the S-4 shall become
effective and addressed to Parent, in form and substance reasonably satisfactory
to Parent and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the S-4.
(b) Parent shall use all reasonable best efforts to cause to be
delivered to the Company a letter of Ernst & Young LLP, the Parent's independent
auditors, dated as of the date on which the S-4 shall become effective and
addressed to the Company, in form and substance reasonably satisfactory to the
Company and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the S-4.
SECTION 6.3 Meeting. The Company shall take all lawful action to (i)
cause a special meeting of its stockholders (the "COMPANY STOCKHOLDER MEETING")
to be duly called and held as soon as practicable after the date of this
Agreement for the purpose of voting on the approval of the Merger on
substantially the terms and conditions set forth in this Agreement and (ii)
solicit proxies from its stockholders to obtain the Company Requisite Vote for
such approval. Subject to the provisions of Section 6.5(b), the Company Board
shall recommend approval of the Merger by the Company's stockholders and the
Company Board shall not withdraw, amend or modify in a manner adverse to Parent
such recommendation (or announce publicly its intention to do so).
SECTION 6.4 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each party
will use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable Laws to consummate the Merger and the
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other transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, each party hereto shall make an appropriate filing
of a Notification and Report Form pursuant to the HSR Act in respect of the
transactions contemplated hereby as promptly as practicable and in any event
within ten business days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and use its reasonable best efforts to take,
or cause to be taken, all other actions consistent with this Section 6.4
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable.
(b) Each of Parent and the Company shall, in connection with the
efforts referenced in Section 6.4(a) to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act, or any other Antitrust Law (as hereinafter defined), use its reasonable
best efforts to (i) cooperate in all respects with each other in connection with
any filing or submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party; (ii) keep the
other party informed in all material respects of any material communication
received by such party from, or given by such party to, the Federal Trade
Commission (the "FTC"), the Antitrust Division of the Department of Justice (the
"DOJ") or any other Governmental Entity and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby; and (iii) permit the
other party to review any material communication given by it to, and consult
with each other in advance of any meeting or conference with, the FTC, the DOJ
or any such other domestic or foreign Governmental Entity or, in connection with
any proceeding by a private party, with any other person, and to the extent
permitted by the FTC, the DOJ or such other applicable domestic or foreign
Governmental Entity or other person, give the other party the opportunity to
attend and participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of the
parties contained in Sections 6.4(a) and (b), each of Parent and the Company
shall use its reasonable best efforts to resolve such objections if any, as may
be asserted by a Governmental Entity or other person in respect of the
transactions contemplated hereby under any Antitrust Law. In connection with the
foregoing, if any administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to be instituted)
challenging any transaction contemplated by this Agreement as violative of any
Antitrust Law, each of Parent and the Company shall cooperate in all respects
with each other and use its respective reasonable best efforts to contest and
resist any such action or proceeding and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement, nothing
in this Section 6.4 shall (i) limit a party's right to terminate this Agreement
pursuant to Section 8.2 so long as such party has up to then complied in all
material respects with its obligations under this Section 6.4, (ii) require
Parent to dispose or hold separate any part of its business or operations or
agree not to compete in any geographic area or line of business or (iii) require
Parent to dispose or hold separate any part of the Company's business or
operations or agree to cause the Company not to compete in any geographic area
or
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line of business which would in any such case impair in any material respect
any of the benefits intended to be derived by Parent after the Effective Time as
a result of the Merger.
(d) The Company agrees that in connection with any litigation which may
be brought against the Company or its directors relating to the transactions
contemplated hereby, the Company will keep Parent, and any counsel which Parent
may retain at its own expense, informed of the course of such litigation, to the
extent Parent is not otherwise a party thereto. The Company agrees that it will
consult with Parent prior to entering into any settlement or compromise of any
such litigation, and that no such settlement or compromise will be entered into
without Parent's prior written consent, which consent shall not be unreasonably
withheld.
SECTION 6.5 Acquisition Proposals.
(a) The Company will not, nor will it permit any of its subsidiaries
to, nor will it authorize or permit any officer, director or employee of or any
investment banker, attorney, accountant or other advisor or representative of,
the Company or any of its subsidiaries to, directly or indirectly, (i) solicit,
initiate or encourage the submission of any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information in respect of, or take any other action to facilitate,
any Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal
provided, however, that nothing contained in this Section 6.5(a) shall prohibit
the Company Board from furnishing any information to, or entering into
discussions or negotiations with, any person that makes an unsolicited bona fide
Acquisition Proposal if, and only to the extent that (A) the Company Stockholder
Meeting shall not have occurred, (B) the Company Board, after consultation with
independent legal counsel, determines in good faith that such action is
necessary for the Company Board to comply with its duties to the Company's
stockholders under applicable Law, (C) the Company Board determines in good
faith that such Acquisition Proposal, if accepted, is reasonably likely to be
consummated taking into account all legal, financial, regulatory and other
aspects of the proposal and the person making the proposal, and believes in good
faith, after consultation with its Financial Advisor and after taking into
account the strategic benefits to be derived from the Merger and the long-term
prospects of Parent and its subsidiaries, would, if consummated, result in a
transaction more favorable to the Company's stockholders than the Merger (any
such more favorable Acquisition Proposal being referred to herein as a "SUPERIOR
PROPOSAL"), and (D) prior to taking such action, the Company (x) provides
reasonable notice to Parent to the effect that it is taking such action and (y)
receives from such person an executed confidentiality/standstill agreement in
reasonably customary form and in any event containing terms at least as
stringent as those contained in the Confidentiality Agreement between Parent and
the Company. The Company shall notify Parent of any Acquisition Proposal
(including, the material terms and conditions thereof and the identity of the
person making it) as promptly as practicable (but in no case later than 24
hours) after its receipt thereof, and shall thereafter inform Parent on a prompt
basis of the status of any discussions or negotiations with such a third party,
and any material changes to the terms and conditions of such Acquisition
Proposal, and shall promptly give Parent a copy of any information delivered to
such person which has not previously been reviewed by Parent. The Company has
ceased and terminated, and has caused its subsidiaries and affiliates, and their
respective officers, directors, employees, investment bankers, attorneys,
accountants and other
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agents and representatives to cease and terminate, any existing activities,
discussions or negotiations with any parties conducted heretofore in respect of
any possible Acquisition Proposal. The Company shall take all necessary steps to
promptly inform the individuals or entities referred to in the first sentence of
this Section 6.5 of the obligations undertaken in this Section 6.5. "ACQUISITION
PROPOSAL" means an inquiry, offer or proposal regarding any of the following
(other than the transactions contemplated by this Agreement) involving the
Company or any of its subsidiaries: (w) any merger, consolidation, share
exchange, recapitalization, business combination or other similar transaction;
(x) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of all or substantially all the assets of the Company and its subsidiaries,
taken as a whole, in a single transaction or series of related transactions; (y)
any tender offer or exchange offer for 20% or more of the outstanding Shares or
the filing of a registration statement under the Securities Act in connection
therewith; or (z) 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.
(b) The Company Board will not withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent, its approval or
recommendation of the Merger unless the Company Board after consultation with
independent legal counsel, determines in good faith that such action is
necessary for the Company Board to comply with its duties to the Company's
stockholders under applicable Law; provided, however, that the Company Board may
not approve or recommend (and in connection therewith, withdraw or modify its
approval or recommendation of the Merger) an Acquisition Proposal unless such an
Acquisition Proposal is a Superior Proposal (and the Company shall have first
complied with its obligations set forth in Section 8.3(a) and the time referred
to in the last sentence of Section 8.3(a) has expired) and unless it shall have
first consulted with independent legal counsel, and have determined that such
action is necessary for the Company Board to comply with its duties to the
Company's stockholders under applicable Law. Nothing contained in this Section
6.5(b) 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, in the good
faith reasonable judgment of the Company Board, after consultation with
independent legal counsel, is required under applicable Law; provided, however,
that except as otherwise permitted in this Section 6.5(b), the Company does not
withdraw or modify, or propose to withdraw or modify, its position in respect of
the Merger or approve or recommend, or propose to approve or recommend, an
Acquisition Proposal. Notwithstanding anything contained in this Agreement to
the contrary, any action by the Company Board permitted by, and taken in
accordance with, this Section 6.5(b) shall not constitute a breach of this
Agreement by the Company. Nothing in this Section 6.5(b) shall (i) permit the
Company to terminate this Agreement (except as provided in Article IX hereof) or
(ii) affect any other obligations of the Company under this Agreement.
SECTION 6.6 Public Announcements. Each of Parent, Merger Sub and the
Company will consult with one another before issuing any press release or
otherwise making any public statements in respect of the transactions
contemplated by this Agreement, including, the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law or by obligations pursuant to any
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listing agreement with the NYSE, as determined by Parent, Merger Sub or the
Company, as the case may be.
SECTION 6.7 Indemnification.
(a) From and after the Effective Time, the Surviving Corporation shall,
and Parent shall cause the Surviving Corporation to the fullest extent permitted
by applicable Law to, indemnify, defend, and hold harmless each person who is
now, or has been at any time prior to the date hereof, or who becomes prior to
the Effective Time, a director or officer of the Company or any subsidiary
thereof (each an "INDEMNIFIED PARTY" and, collectively, the "INDEMNIFIED
PARTIES") against all losses, expenses (including, reasonable attorneys' fees
and expenses), claims, damages, costs or liabilities or, subject to the proviso
of the next succeeding sentence, amounts paid in settlement, arising out of
actions or omissions occurring at or prior to the Effective Time and whether
asserted or claimed prior to, at or after the Effective Time that are in whole
or in part (i) based on, or arising out of the fact that such person is or was a
director or officer of such party or a subsidiary of such party or (ii) based
on, arising out of or pertaining to the transactions contemplated by this
Agreement. Without limiting the foregoing, in the event of any such loss,
expense, claim, damage, cost or liability (whether or not arising before the
Effective Time), (A) the Surviving Corporation shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Surviving Corporation, promptly after statements
therefor are received and otherwise advance to such Indemnified Party upon
request for reimbursement of documented expenses reasonably incurred, in either
case to the extent not prohibited by the MGCL and upon receipt of any
affirmation and undertaking required by the MGCL, (B) the Surviving Corporation
will cooperate in the vigorous defense of any such matter and (C) any
determination required to be made in respect of whether an Indemnified Party's
conduct complies with the standards set forth under the MGCL and the Surviving
Corporation's charter or bylaws shall be made by independent counsel mutually
acceptable to the Surviving Corporation and the Indemnified Party; provided,
however, that the Surviving Corporation shall not be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld). The Indemnified Parties as a group may retain only one law firm in
respect of each related matter except to the extent there is, in the opinion of
counsel to an Indemnified Party, under applicable standards of professional
conduct, a conflict on any significant issue between positions of any two or
more Indemnified Parties.
(b) For a period of six years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect the policies of directors'
and officers' liability insurance maintained by the Company for the benefit of
those persons who are covered by such policies at the Effective Time (or the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms not less advantageous to the insured
parties in respect of matters occurring prior to the Effective Time), to the
extent that such liability insurance can be maintained annually at a cost to the
Surviving Corporation not greater than 200% of the premium for the current
Company directors' and officers' liability insurance; provided, however, that if
such insurance cannot be so maintained or obtained at such costs, the Surviving
Corporation shall maintain or obtain as much of such insurance as can be so
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maintained or obtained at a cost equal to 200% of the current annual premiums of
the Company for such insurance.
(c) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity or such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in either such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation shall assume the
obligations set for in this Section 6.7.
(d) To the fullest extent permitted by Law, from and after the
Effective Time, all rights to liability limitation, exculpation or
indemnification now existing in favor of the employees, agents, directors or
officers of the Company and its subsidiaries in respect of their activities as
such prior to the Effective Time, as provided in the Company's charter or
bylaws, in effect on the date thereof or otherwise in effect on the date hereof,
shall survive the Merger (and as of or prior to the Effective Time, Parent shall
cause the bylaws of Merger Sub to reflect such provisions) and shall continue in
full force and effect and shall not be amended or modified for a period of not
less than six years from the Effective Time.
(e) The provisions of this Section 6.7 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs, and his or her representatives.
SECTION 6.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Merger Sub, and Parent and Merger Sub shall give
prompt notice to the Company, of (i) the occurrence or nonoccurrence of any
event the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate at or prior to the Effective Time so as to cause the conditions set
forth in Article VII hereof to fail to be satisfied, or (ii) any material
failure of the Company, Parent or Merger Sub, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder so as to cause the conditions set forth in Article VII hereof to
fail to be satisfied; provided, however, that the delivery of any notice
pursuant to this Section 6.8 shall not cure such breach or non-compliance or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
SECTION 6.9 Tax-Free Reorganization Treatment. The parties hereto
intend that the Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code. Each of the parties hereto shall, and shall cause
its respective subsidiaries to, use its reasonable best efforts to cause the
Merger to so qualify.
SECTION 6.10 Employee Matters.
Except as contemplated by this Agreement, Parent will and will cause
the Surviving Corporation to honor the obligations of the Company or any of its
subsidiaries under the provisions of each Benefit Plan and Employee Arrangement;
provided that the Company shall have the right at any time to amend or terminate
any such Benefit Plan and Employee Arrangement in accordance with their terms.
The employees of the Company will be eligible to
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participate in Parent's applicable employee benefit plans, as such plans may be
in effect from time to time, as soon as administratively convenient (as
determined at Parent's sole discretion) after the Effective Time and, at
Parent's sole discretion, will become employees of Parent or any of its
subsidiaries. Until such time as employees of the Company immediately (the
"COMPANY EMPLOYEES") become eligible to participate in Parent's applicable
employee benefit plans (the "BENEFITS INTEGRATION DATE"), Parent shall cause
such employee welfare benefits to be maintained for such Company Employees that
are, in the aggregate, no less favorable than those provided to such Company
Employees immediately prior to the Effective time. Following the Benefits
Integration Date, with respect to each plan maintained by Parent in which any
Company Employee participates (each, a "PARENT PLAN") that is an "employee
benefit plan" as defined in Section 3(3) of ERISA, for purposes of eligibility
to participate, vesting and, solely with respect to severance and vacation,
level of benefit entitlement (but in no event for purposes of benefits accrual),
service with the Company and its affiliates (or predecessor employers to the
extent the Company and its affiliates provided past service credit) shall be
treated as service with Parent to the same extent such service was counted under
the corresponding Benefit Plan, if any; provided, however, that such service
shall not be recognized to the extent that such recognition would result in a
duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evident of insurability requirements, or the
application of any preexisting condition limitations. Each Parent Plan shall
waive preexisting condition limitations to the same extent waived under the
corresponding Benefit Plan. Company Employees shall be given credit under the
applicable Parent Plan for amounts paid under a corresponding Benefit Plan
during the same period for though such amounts had been paid in accordance with
the terms and conditions of the Parent Plan.
SECTION 6.11 Company Affiliate Agreements. Section 6.11 of the Company
Disclosure Schedule sets forth a list of all persons who are, and all persons
who to the Company's knowledge will be at the Closing Date, "affiliates" of the
Company for purposes of Rule 145 under the Securities Act. The Company will
cause such list to be updated promptly through the Closing Date. Not later than
45 days prior to the date of the Company Stockholder Meeting, the Company shall
cause its "affiliates" to deliver to Parent a Company Affiliate Agreement
substantially in the form attached as EXHIBIT B.
SECTION 6.12 SEC and Other Filings. Each of Parent and the Company
shall promptly provide the other party (or its counsel) with copies of all
filings made by the other party or any of its subsidiaries with the SEC or any
other state, federal or foreign Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
SECTION 6.13 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement, the Option
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such Expenses, except (a) Expenses incurred in connection
with the filing, printing and mailing of the Proxy Statement and the S-4, which
shall be shared equally by the Company and Parent, (b) the filing fees required
under the HSR Act, which shall be shared equally by the Company and Parent and
(c) if applicable, as provided in Section 8.5. As used in this Agreement,
"EXPENSES" includes all out-of-pocket expenses (including all fees and expenses
of counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its
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behalf in connection with, or related to, the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, filing, printing and mailing of
the Proxy Statement and the S-4 and the solicitation of stockholder approvals
and all other matters related to the transactions contemplated hereby.
SECTION 6.14 Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 6.15 Listing of Stock. Parent shall use its reasonable best
efforts to cause the shares of Parent Common Stock to be issued in connection
with the Merger to be approved for listing on the NYSE on or prior to the
Closing Date, subject to official notice of issuance.
SECTION 6.16 Antitakeover Statutes. If any Takeover Statute is or may
become applicable to the Merger or the Option Agreement, each of Parent and the
Company shall take such actions as are necessary so that the transactions
contemplated by this Agreement or the Option Agreement, as applicable, may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of any Takeover Statute on
the Merger or the Option Agreement.
SECTION 6.17 Termination of Credit Agreement. Prior to Closing, the
Company shall prepay any amounts outstanding under, and shall use its reasonable
best efforts to terminate, the Loan Agreement dated as of March 19, 1999 between
the Company, Fleet National Bank and the other banks party thereto.
SECTION 6.18 Benchmarq. At the request of Parent, the Company shall
merge or liquidate Benchmarq Microelectronics, Inc., a Delaware corporation,
into the Company on terms and conditions as are satisfactory to Parent.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefited thereby, to the extent
permitted by applicable Law:
(a) The Merger shall have been approved and adopted by the
Company Requisite Vote.
(b) Any waiting periods applicable to the Merger under the HSR
Act shall have expired or early termination thereof shall have been
granted.
(c) There shall not be in effect any Law of any Governmental
Entity of competent jurisdiction restraining, enjoining or otherwise
preventing consummation of
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the transactions contemplated by this Agreement and no Governmental
Entity shall have instituted any proceeding which continues to be
pending seeking any such Law.
(d) The S-4 shall have been declared effective by the SEC and
shall be effective at the Effective Time, and no stop order suspending
effectiveness shall have been issued and no action, suit, proceeding
or investigation by the SEC to suspend the effectiveness thereof shall
have been initiated and be continuing.
(e) The Parent Common Stock required to be issued hereunder shall
have been approved for listing on the NYSE, subject only to official
notice of issuance.
SECTION 7.2 Conditions to the Obligations of Parent and Merger Sub. The
respective obligations of Parent and Merger Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following additional conditions, any or all of
which may be waived in whole or part by Parent and Merger Sub, as the case may
be, to the extent permitted by applicable Law:
(a) The representations and warranties of the Company contained herein,
shall have been true, except where the failure to be true, individually or in
the aggregate, has not had or is not reasonably expected to have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole, in each
case when made and on and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of a specified
date, which shall speak only as of the specified date).
(b) The Company shall have performed or complied in all material
respects with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the time of the Closing.
(c) The Company shall have delivered to Parent a certificate, dated the
date of the Closing, signed by the President or any Vice President of the
Company (but without personal liability thereto), certifying as to the
fulfillment of the conditions specified in Sections 7.2(a) and 7.2(b).
(d) Parent shall have received an opinion of its tax counsel, Weil,
Gotshal & Xxxxxx LLP, dated the Effective Time, to the effect that the Merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Code. The issuance of such opinion shall be conditioned on the receipt by such
tax counsel of representation letters from each of the Parent, Merger Sub and
the Company, in each case, in form and substance reasonably satisfactory to
Weil, Gotshal & Xxxxxx LLP. Each such representation letter shall be dated on or
before the date of such opinion and shall not have been withdrawn or modified in
any material respect.
(e) All authorizations, consents or approvals of (i) any German
Governmental Entity required under any German Antitrust Laws in connection with
the execution and delivery of this Agreement and the performance of the
obligations hereunder and (ii) any other Governmental Entity (other than those
specified in Section 7.1(b)) required in connection with the execution and
delivery of this Agreement and the performance of the obligations hereunder
shall have been
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made or obtained, without any limitation, restriction or condition that is
reasonably expected to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole (or an effect on Parent and its subsidiaries that,
were such effect applied to the Company and its subsidiaries, is reasonably
expected to have a Material Adverse Effect on the Company), except for such
authorizations, consents or approvals, the failure of which to have been made or
obtained is not reasonably expected to have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole (or an effect on Parent and its
subsidiaries that, were such effect applied to the Company and its subsidiaries,
is reasonably expected to have a Material Adverse Effect on the Company).
(f) Not later than 45 days prior to the date of the Company Stockholder
Meeting, Parent shall have received from the Company's "affiliates" a Company
Affiliate Agreement substantially in the form attached as EXHIBIT B.
(g) The Company shall have received and delivered to Parent a letter
from Pricewaterhouse Coopers LLP dated as of the Closing Date, stating that no
conditions exist that would preclude the Company from being party to a business
combination for which the "pooling of interests" method of accounting would be
available. Parent shall have received and (unless waived by the Company)
delivered to the Company a letter from Ernst & Young LLP, dated as of the date
the S-4 is declared effective and dated as of the Closing Date, stating that
accounting of the Merger as a "pooling of interests" under APB 16 and the
applicable SEC rules and regulations is appropriate if the Merger is consummated
as contemplated by this Agreement. Notwithstanding the foregoing, the
satisfaction of this Section 7.2(g) shall not be a condition to the obligations
of Parent and Merger Sub to effect the Merger if the failure to satisfy this
condition results from any action taken or agreed to be taken by or on behalf of
Parent or Merger Sub.
SECTION 7.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Effective Time of
each of the following conditions, any or all of which may be waived in whole or
in part by the Company to the extent permitted by applicable Law:
(a) The representations and warranties of Parent and Merger Sub
contained herein shall have been true, except where the failure to be true,
individually or in the aggregate, has not had or is not reasonably expected to
have, a Material Adverse Effect on Parent and its subsidiaries taken as a whole,
in each case when made and on and as of the Closing Date as though made on and
as of the Closing Date (except for representations and warranties made as of a
specified date, which shall speak only as of the specified date).
(b) Parent shall have performed or complied in all material respects
with all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the time of the Closing.
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56
(c) Parent shall have delivered to the Company a certificate, dated the
date of the Closing, signed by the President or any Vice President of Parent
(but without personal liability thereto), certifying as to the fulfillment of
the conditions specified in Sections 7.3(a) and 7.3(b).
(d) The Company shall have received an opinion of its tax counsel,
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, dated the Effective Time, to the
effect that the Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code. The issuance of such opinion shall be conditioned on
the receipt by such tax counsel of representation letters from each of the
Parent, Merger Sub and the Company, in each case, in form and substance
reasonably satisfactory to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP. Each such
representation letter shall be dated on or before the date of such opinion and
shall not have been withdrawn or modified in any material respect.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1 Termination by Mutual Agreement. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Requisite Vote referred to in Section 7.1(a), by mutual written consent of the
Company and Parent by action of their respective Boards of Directors.
SECTION 8.2 Termination by Either Parent or the Company. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of the Board of Directors of either Parent or the
Company if:
(a) the Merger shall not have been consummated by February 29,
2000, whether such date is before or after the date of approval of the
Merger by the Company Requisite Vote (the "TERMINATION Date");
provided, however, that if either Parent or the Company reasonably
determines in good faith that additional time is necessary in
connection with obtaining any consent, registration, approval, permit
or authorization required to be obtained from any Governmental Entity,
the Termination Date may be extended by Parent or the Company from
time to time by written notice to the other party to a date not beyond
March 31, 2000;
(b) the Company Requisite Vote shall not have been obtained at
the Company Stockholder Meeting or at any adjournment or postponement
thereof;
(c) any Law permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and
non-appealable (whether before or after the approval of the Merger by
the Company Requisite Vote); or
(d) any Governmental Entity shall have failed to issue an order,
decree or ruling or to take any other action which is necessary to
fulfill the conditions set forth in Sections 7.1(b), 7.1(d) and
7.2(e), as applicable, and such denial of a request to issue such
order, decree or ruling or take such other action shall have been
final and nonappealable;
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57
provided, however, that the right to terminate this Agreement pursuant
to this Section 8.2 shall not be available to any party that has
breached in any material respect its obligations under this Agreement
in any manner that shall have proximately contributed to the occurrence
of the failure of the Merger to be consummated.
SECTION 8.3 Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Requisite Vote referred to in Section 7.1(a), by action of the Company Board:
(a) if (i) the Company is not in breach of Section 6.5, (ii) the
Merger shall not have been approved by the Company Requisite Vote,
(iii) the Company Board authorizes the Company, subject to complying
with the terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior
Proposal and the Company notifies Parent in writing that it intends to
enter into such an agreement, attaching the most current version of
such agreement to such notice, and (iv) during the three business day
period after the Company's notice, (A) the Company shall have
negotiated with, and shall have caused its respective financial and
legal advisors to negotiate with, Parent to attempt to make such
commercially reasonable adjustments in the terms and conditions of
this Agreement as would enable the Company to proceed with the
transactions contemplated hereby and (B) the Company Board shall have
concluded, after considering the results of such negotiations, that
any Superior Proposal giving rise to the Company's notice continues to
be a Superior Proposal. The Company may not effect such termination
unless contemporaneously therewith the Company pays to Parent in
immediately available funds the fees required to be paid pursuant to
Section 8.5. The Company agrees (x) that it will not enter into a
binding agreement referred to in clause (iii) above until at least the
day following the third business day after it has provided the notice
to Parent required thereby and (y) to notify Parent promptly if its
intention to enter into a written agreement referred to in its
notification shall change at any time after giving such notification;
or
(b) if there is a breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement contained in this
Agreement that cannot be cured and would cause a condition set forth
in Section 7.3(a) or 7.3(b) to be incapable of being satisfied as of
the Termination Date.
SECTION 8.4 Termination by Parent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by Parent,
if:
(a) the Company enters into a binding agreement for a Superior
Proposal, or the Company Board shall have withdrawn or adversely
modified its approval or recommendation of the Merger; or
(b) there is a breach by the Company of any representation,
warranty, covenant or agreement contained in this Agreement that
cannot be cured and would cause
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58
a condition set forth in Section 7.2(a) or 7.2(b) to be incapable of
being satisfied as of the Termination Date.
SECTION 8.5 Effect of Termination and Abandonment.
(a) In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article VIII, this Agreement (other than this
Section 8.5, Sections 5.2(c) and 6.13, and Article IX) shall become void and of
no effect with no liability on the part of any party hereto (or of any of its
directors, officers, employees, agents, legal and financial advisors, or other
representatives); provided, however, that except as otherwise provided herein,
no such termination shall relieve any party hereto of any liability or damages
resulting from any willful breach of this Agreement.
(b) In the event that (i) a bona fide Acquisition Proposal shall have
been made or any person shall have publicly announced an intention (whether or
not conditional) to make a bona fide Acquisition Proposal in respect of the
Company or any of its subsidiaries and thereafter this Agreement is terminated
by either Parent or the Company pursuant to Section 8.2(b) (provided that within
9 months of the termination of this Agreement any Acquisition Proposal by a
third party is entered into, agreed to, or consummated by the Company) or (ii)
this Agreement is terminated by the Company pursuant to Section 8.3(a), or (iii)
this Agreement is terminated by Parent pursuant to Section 8.4(a) or Section
8.4(b) as a result of a material breach by the Company of any of the covenants
set forth in Section 6.5 hereof, then the Company shall pay Parent a termination
fee of $41,700,000 in same-day funds, on the date of such termination, in the
case of clause (ii) or (iii), or on the earlier of the date an agreement is
entered into in respect of an Acquisition Proposal or an Acquisition Proposal is
consummated in the case of clause (i), provided, however, that notwithstanding
the foregoing, Parent will not be entitled to a termination fee pursuant to
clause (i) above in the event the Acquisition Proposal entered into, agreed to
or consummated after such termination is an Acquisition Proposal whereby (A) the
Company or any of its subsidiaries acquires a third party (the "EXEMPT ACQUIRED
PERSON") pursuant to a merger, consolidation, recapitalization, share exchange
or similar transaction in which the Company survives and the shareholders of the
Exempt Acquired Person receive shares of Company Common Stock which, immediately
following consummation of such merger, consolidation, recapitalization, share
exchange or similar transaction, will represent no more than 45% of the issued
and outstanding shares of Company Common Stock (or securities convertible or
exchangeable into, or exercisable for Company Common Stock, whether upon the
passage of time or otherwise) and (B) such Exempt Acquired Person, or any
affiliate or affiliates thereof, was or were not the subject of an Acquisition
Proposal at any time after the date hereof prior to the termination of this
Agreement.
(c) The Company acknowledges that the agreements contained in Section
8.5(b) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Parent and Merger Sub would not have entered
into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to Section 8.5(b), and, in order to obtain such payment,
Parent commences a suit which results in a judgment against the Company for the
fee set forth in this Section 8.5, the Company shall pay to Parent its costs and
expenses (including, attorneys' fees) in connection with such suit, together
with interest from the date of
50
59
termination of this Agreement on the amounts owed at the prime rate of Bank of
America, N.A., in effect from time to time during such period.
SECTION 8.6 Amendment. This Agreement may be amended by action taken by
the Company, Parent and Merger Sub at any time before or after approval of the
Merger by the Company Requisite Vote but, after any such approval, no amendment
shall be made which requires the approval of such stockholders under applicable
Law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
SECTION 8.7 Extension; Waiver. At any time prior to the Effective Time,
each party hereto (for these purposes, Parent and Merger Sub shall together be
deemed one party and the Company shall be deemed the other party) may (i) extend
the time for the performance of any of the obligations or other acts of the
other party, (ii) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document, certificate or writing
delivered pursuant hereto, or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
any party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Entire Agreement; Assignment.
(a) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement between the
parties hereto in respect of the subject matter hereof and supersedes
all other prior agreements and understandings, both written and oral,
between the parties in respect of the subject matter hereof, other
than the Confidentiality Agreement (which shall remain in effect).
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by operation of Law (including
by merger or consolidation) or otherwise without the prior written
consent of the other parties. Any assignment in violation of the
preceding sentence shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors
and permitted assigns.
SECTION 9.2 Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) five business days following sending by registered or
certified mail, postage prepaid, (ii) when sent if sent by facsimile; provided,
however, that the facsimile is promptly confirmed by telephone confirmation
thereof, (iii) when delivered, if delivered personally to the intended
recipient, and (iv) one business day following sending by overnight delivery via
a national courier service, and in each case, addressed to a party at the
following address for such party:
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60
if to Merger Sub or to
Parent, to: Texas Instruments Incorporated
0000 Xxxxxxxxx Xxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
X.X. Xxx 000000, X/X 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
with copies to: Texas Instruments Incorporated
0000 Xxxxxx Xxxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
X.X. Xxx 000000, X/X 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: R. Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company, to: Unitrode Corporation
0 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to: Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
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61
SECTION 9.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Maryland, without giving
effect to the choice of Law principles thereof.
SECTION 9.4 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.5 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, and, except as provided in Section 6.7, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
SECTION 9.6 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
SECTION 9.7 Specific Performance. 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 court of the
United States located in the State of Maryland or in Maryland state court, 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 federal court located in the State of Maryland
or any Maryland state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (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, and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a federal or state court sitting in the State of
Maryland.
SECTION 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
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SECTION 9.9 Interpretation.
(a) The words "hereof," "herein," "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit, and schedule references are to the articles,
sections, paragraphs, exhibits, and schedules of this Agreement unless otherwise
specified. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation," the word "or" shall mean "and/or." All terms defined in this
Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time, amended, qualified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments
thereto and instruments incorporated therein. References to a person are also to
its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof," and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to July 25, 1999. The phrase "made available" in this Agreement shall
mean that the information referred to has been actually delivered to the party
to whom such information is to be made available.
(c) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
SECTION 9.10 Definitions. As used herein,
(a) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" has the meaning
provided in Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(b) "BUSINESS DAY" shall mean any day other than Saturday, Sunday or
any day on which banks in New York City, New York are required or authorized by
Law to be closed for business.
(c) "KNOW" or "KNOWLEDGE" means, in respect of any party, the actual
knowledge of such party's executive officers, without any requirement to
undertake an independent investigation.
(d) "MATERIAL ADVERSE EFFECT" means in respect of any entity, any
change, circumstance, effect or development that, individually or in the
aggregate with all other changes,
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63
circumstances and effects, is or is reasonably likely to be materially adverse
to (i) the assets, properties, financial condition or results of operations of
such entity and its subsidiaries taken as a whole, other than any change,
circumstance, effect or development (A) relating to the economy in general in
any country in which such entity operates or owns assets, (B) relating to the
semiconductor industry (it being understood that this clause (B) shall not
exclude, in the case of any Material Adverse Effect with respect to the Company,
any change, circumstance, effect or development relating to the semiconductor
industry that disproportionately impacts the Company), (C) arising out of or
resulting from actions contemplated by the parties in connection with, or which
is attributable to, the announcement of this Agreement and the transactions
contemplated hereby (including loss of customers or suppliers or the delay or
cancellation of orders for products, but excluding in the case of the Company
the loss of employees), or (D) any shareholder litigation or litigation by any
Governmental Entity, in each case brought or threatened against such entity or
any member of its board of directors in respect of this Agreement or the
transactions contemplated hereby; provided that neither (x) any change in the
market price or trading volume of the Company Common Stock or Parent Common
Stock nor (y) a failure by the Company or Parent to meet the revenue or earnings
predictions of equity analysis reflected in the First Call consensus estimate,
or any other revenue or earnings predictions or expectations, for any period
ending on or after the date of this Agreement shall, in and of itself,
constitute a Material Adverse Effect (it being understood that this proviso, as
it relates to (y), shall not exclude any underlying change, circumstance, effect
or development which resulted in such failure to meet such estimates,
predictions or expectations), or (ii) the ability of such party to consummate
the transactions contemplated by this Agreement.
(e) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(f) "SUBSIDIARY" means, in respect of any party, any corporation,
partnership or other entity or organization, whether incorporated or
unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions in respect of such corporation
or other organization is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one or
more of its subsidiaries.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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64
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the date first above written.
UNITRODE CORPORATION
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
TEXAS INSTRUMENTS INCORPORATED
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
UNICORN ACQUISITION CORP.
By: /s/ XXXXXXX X. XXXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
65
EXHIBIT A
VOTING AGREEMENT
In consideration of Texas Instruments Incorporated, a Delaware
corporation ("PARENT"), Unicorn Acquisition Corp., a Maryland corporation
("MERGER SUB"), and Unitrode Corporation, a Maryland corporation (the
"COMPANY"), entering into on the date hereof an Agreement and Plan of Merger,
dated as of the date hereof (the "MERGER AGREEMENT") which provides, among other
things, that Merger Sub, upon the terms and subject to the conditions thereof,
will be merged with and into the Company (the "MERGER") and each outstanding
share of Company Common Stock (as defined in the Merger Agreement) will be
converted into the Share Consideration (as defined in the Merger Agreement) in
accordance with the terms of the Merger Agreement, each of the undersigned
holders (each, a "STOCKHOLDER") of shares of Company Common Stock agrees with
each of Parent, Merger Sub and the Company as follows:
1. Each Stockholder hereby agrees, in person or by proxy, to vote the
shares of Company Common Stock set forth opposite its name in SCHEDULE A hereto
(the "SCHEDULE A SECURITIES") to approve and adopt the Merger and the
transactions contemplated thereby at any meeting or meetings of the stockholders
of the Company, and at any adjournment thereof or pursuant to action by written
consent, at or by which the Merger or such other transactions, are submitted for
the consideration and vote of the stockholders of the Company.
2. Each Stockholder hereby agrees that such Stockholder shall not enter
into any voting agreement or grant a proxy or power of attorney with respect to
the Schedule A Securities which is inconsistent with the obligations of such
Stockholder under this Agreement.
3. A Stockholder may sell, assign, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding in respect
of the direct or indirect sale, assignment, transfer, encumbrance or other
disposition of, any Schedule A Securities during the term of this Agreement
provided such Stockholder provides written notice to Parent and first obtains a
written agreement from the proposed transferee pursuant to which the proposed
transferee agrees to be bound by the terms of this Agreement.
4. Each Stockholder hereby represents and warrants to Parent and Merger
Sub that as of the date hereof:
(a) Such Stockholder (i) owns beneficially all of the shares of
Company Common Stock set forth opposite the Stockholder's name in
SCHEDULE A hereto, (ii) has the legal power, authority and right to
enter into, execute and deliver this Voting Agreement without the
consent or approval of any other person, and (iii) has not entered
into any voting agreement or other similar
A-1
66
agreement with or granted any person any proxy (revocable or
irrevocable) in respect of such shares (other than this Voting
Agreement).
(b) Assuming due authorization, execution and delivery by the
other parties hereto, this Voting Agreement is the valid and binding
agreement of such Stockholder.
(c) No investment banker, broker or finder is entitled to a
commission or fee from such Stockholder in respect of this Voting
Agreement based upon any arrangement or agreement made by or on behalf
of the Stockholder.
5. If any provision of this Voting Agreement shall be invalid or
unenforceable under applicable law, such provision shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining provisions of this Voting Agreement.
6. This Voting Agreement may be executed in two or more counterparts
each of which shall constitute one and the same instrument.
7. The parties hereto agree that if for any reason any party hereto
shall have failed to perform its obligations under this Voting Agreement, then
the party seeking to enforce this Voting Agreement against such non-performing
party shall be entitled to specific performance and injunctive and other
equitable relief, and the parties hereto further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive relief. This provision is without prejudice to any other rights
or remedies, whether at law or in equity, that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Voting Agreement.
8. This Voting Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland.
9. This Agreement shall terminate upon the earlier of (a) the Effective
Time (as defined in the Merger Agreement) or (b) the termination of the Merger
Agreement in accordance with its terms.
10. Parent, Merger Sub and the Company understand and agree that this
Agreement pertains only to each Stockholder and not to any of its affiliates, if
any, or advisers.
11. Neither Parent, Merger Sub nor the Company will enter into any
agreement with any other stockholder of the Company having a purpose or effect
substantially similar to that of this Voting Agreement on financial terms (in
respect of such other stockholder) more favorable than the terms of this Voting
Agreement.
X-0
00
00. Any Stockholder who is also a director or officer of the Company
will not, by execution of this Agreement, be precluded from exercising his or
her duties under applicable law in his or her capacity as a director with
respect to the Company and nothing herein will limit or affect, or give rise to
any liability to a Stockholder by virtue of any actions taken by such
Stockholder in his or her capacity as a director or officer of the Company.
13. Nothing contained in this Voting Agreement shall be deemed to vest
in Parent, Merger Sub or the Company any direct or indirect ownership or
incidence of ownership of or with respect to any Schedule A Securities. All
rights, ownership and economic benefits of and relating to the Schedule A
Securities shall remain and belong to the applicable Stockholder and neither
Parent, Merger Sub nor the Company shall have any power or authority to direct
any Stockholder in the voting of any Schedule A Securities or the performance by
any Stockholder of its duties or responsibilities as a stockholder of the
Company, except as otherwise provided herein.
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A-3
68
IN WITNESS WHEREOF, the parties hereto have executed this Voting
Agreement as of July ___, 1999.
TEXAS INSTRUMENTS INCORPORATED
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
UNICORN ACQUISITION CORP.
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
UNITRODE CORPORATION
By:
-----------------------------------------
Name:
Title:
X-0
00
XXXXXXXXXXXX
---------------------------------------------
Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X.X. Xxxxx
---------------------------------------------
Xxxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxx
---------------------------------------------
Xxxxx X. Xxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxxxxx
---------------------------------------------
Xxxx X. Xxxxxxx
---------------------------------------------
Xxxxx X. Xxxxxxxxxxx
---------------------------------------------
Xxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
A-5
70
SCHEDULE A
TO
VOTING AGREEMENT
Stockholder Class Number of Shares
----------- ----- ----------------
Xxxxxxxx X. Xxxxxxx Common 605,212
Xxxxxx X. Xxxxx Common 87,000
Xxxxxx X. Xxxxxxxxxx Common 50,000
Xxxxx X. Xxxxxxxx Common 119,750
Xxxxxxx X. Xxxxxxx Common 6,000
A-6
71
EXHIBIT B
[FORM OF COMPANY AFFILIATE AGREEMENT TO PARENT]
[Date]
Texas Instruments Incorporated
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Dear Sir/Madam:
Reference is made to the provisions of the Agreement and Plan of
Merger, dated as of July 25, 1999 (together with any amendments thereto, the
"Merger Agreement"), among Unitrode Corporation, a Maryland corporation (the
"Company"), Texas Instruments Incorporated, a Delaware corporation ("Parent"),
and Unicorn Acquisition Corp., a Maryland corporation and a direct wholly owned
subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub will be merged
with and into the Company, with the Company continuing as the surviving
corporation (the "Merger"). This letter constitutes the undertakings of the
undersigned contemplated by the Merger Agreement, and as is being furnished
pursuant to Section 6.11 thereto.
I understand that I may be deemed to be an "affiliate" of the Company,
as such term is defined for purposes of paragraphs (c) and (d) of Rule 145
("Rule 145") promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Execution of this letter shall not be construed as an
admission of "affiliate" status nor as a waiver of any rights that I may have to
object to any claim that I am an "affiliate" on or after the date of this
letter.
If in fact I were to be deemed an "affiliate" of the Company under
paragraphs (c) and (d) of Rule 145, my ability to sell, transfer or otherwise
dispose of any shares of the common stock, par value $1.00 per share, of Parent
(the "Parent Shares") received by me in exchange for any shares of Company
Capital Stock (as defined in the Merger Agreement) pursuant to the Merger may be
restricted.
I hereby represent, warrant and covenant to Parent that:
a. I will not sell, pledge, transfer, or otherwise dispose of any of
the Parent Shares except (i) pursuant to an effective registration statement
under the Securities Act, or (ii) as permitted by, and in accordance with, Rule
145 or another applicable exemption under the Securities Act and the rules and
regulations promulgated thereunder; and
b. I will not (i) sell, pledge, transfer, or otherwise dispose of any
Company Shares during the 30-day period prior to the Effective Time (as defined
in the Merger Agreement) or (ii) sell or otherwise reduce my risk (within the
meaning of the Securities and Exchange Commission's Financial Reporting Release
No. 1., "Codification of Financial Reporting Policies," Section 201.01 47 F.R.
21028 (April 15, 1982)) relative to any Parent Shares until
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after such time as consolidated financial results (including, combined sales and
net income) covering at least 30 days of post-merger combined operations of
Parent and the Company have been published by Parent, except as permitted by
Staff Accounting Bulletin No. 76 issued by the Securities and Exchange
Commission.
Parent will file with the Securities and Exchange Commission in a
timely manner all reports required to be filed pursuant to Sections 12 and 13 of
the Securities Exchange Act of 1934, as amended such that the undersigned's
Parent Shares may be sold or disposed of under Rule 145. Except as otherwise
provided in the Merger Agreement or this Letter, Parent is under no obligation
to register the sale, transfer, pledge, or other disposition of the Parent
Shares or to take any other action necessary for the purpose of making an
exemption from registration available.
I understand that Parent will issue stop transfer instructions to its
transfer agents with respect to the Parent Shares and that a restrictive legend
will be placed on certificates delivered to me evidencing the Parent Shares in
substantially the following form:
"This certificate and the shares represented hereby have been issued
pursuant to a transaction governed by Rule 145 ("Rule 145") promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
sold or otherwise disposed of unless registered under the Securities Act
pursuant to a Registration Statement in effect at the time or unless the
proposed sale or disposition can be made in compliance with Rule 145 or without
registration in reliance on another exemption therefrom. Reference is made to
that certain letter agreement, dated __________, 1999, between the holder of
this certificate and the issuer of this security (a copy of which is on file in
the principal office of such issuer) which contains further restrictions on the
transferability of the shares represented hereby."
The term Parent Shares as used in this letter shall mean and include
not only the common stock of Parent as presently constituted, but also any other
stock which may be issued in exchange for, in lieu of, or in addition to, all or
any part of such Parent Shares.
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I hereby acknowledge that Parent and its independent public accountants
will be relying upon this letter in connection with the determination that the
Merger will qualify and be accounted for as a "pooling of interests", and that I
understand the requirements of this letter and the limitations imposed upon the
transfer, sale or other disposition of the Company Shares and the Parent Shares.
Very truly yours,
Name:
-----------------------------------
Countersigned:
TEXAS INSTRUMENTS INCORPORATED
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
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EXHIBIT C
OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of July 25, 1999 (the "STOCK OPTION
AGREEMENT"), between Texas Instruments Incorporated, a Delaware corporation
("PARENT"), and Unitrode Corporation, a Maryland corporation (the "COMPANY").
WHEREAS, Parent, Unicorn Acquisition Corp., a Maryland corporation and
a wholly owned subsidiary of Parent ("MERGER SUB"), and the Company are parties
to that certain Agreement and Plan of Merger, dated as of the date hereof (the
"MERGER AGREEMENT"), which provides, among other things, that Merger Sub, on the
terms and subject to the conditions thereof, will merge with and into the
Company with the Company surviving as a wholly owned subsidiary of Parent;
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that the Company grant to Parent an option to
purchase up to 6,470,760 shares of common stock, par value $0.01 per share
("COMMON STOCK") of the Company, upon the terms and subject to the conditions
hereof; and
WHEREAS, in order to induce Parent to enter into the Merger Agreement,
the Company is willing to grant Parent the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments.
(a) Subject to the other terms and conditions set forth herein,
the Company hereby grants to Parent an irrevocable option (the "OPTION") to
purchase up to 6,470,760 shares of Common Stock (the "SHARES"). The purchase
price per Share (the "PURCHASE PRICE") shall be $38.60. The Purchase Price and
the number of Shares shall be subject to adjustment as provided in Section 1(c)
hereof.
Parent may exercise the Option with respect to any or all of the Option
Shares at any one time or from time to time, subject to the provisions of
Section 1(c) hereof, upon the occurrence of an Exercise Event (as defined
below). Subject to the last sentence of this Section 1(b), the Option will
terminate and be of no further force and effect upon the earliest to occur of
(i) the Effective Time (as defined in the Merger Agreement), (ii) 120 days after
the first occurrence of an Exercise Event, and (iii) the termination of the
Merger Agreement in accordance with its terms so long as, in the case of this
clause (iii), no Exercise Event has occurred or could still occur under Section
8.5(b) of the Merger Agreement, in which case the Option will terminate on the
later of (x) 120 days following the time such termination fee becomes
unconditionally payable and (y) the expiration of the period in which an
Exercise Event could occur pursuant to Section 8.5(b) of the Merger Agreement.
"Exercise Event" means any event as a result of which Parent is unconditionally
entitled to receive a termination fee pursuant to Section 8.5(b) of the Merger
Agreement. Notwithstanding the termination of the Option, Parent shall be
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entitled to purchase the Shares with respect to which it has exercised the
Option in accordance with the terms hereof prior to the termination of the
Option.
In the event Parent is entitled to and wishes to exercise the Option,
the Parent shall send a written notice to the Company (the "STOCK EXERCISE
NOTICE") specifying a date (subject to the HSR Act (as defined below)) not later
than 20 business days and not earlier than three business days following the
date such notice is given for the closing of such purchase and specifying the
number of Shares Parent wishes to purchase. In the event of any change in the
number of issued and outstanding shares of Common Stock by reason of any stock
dividend, stock split, split-up, recapitalization, merger or other change in the
corporate or capital structure of the Company, the number of Shares subject to
this Option and the purchase price per Share shall be appropriately adjusted to
restore the Parent to its rights hereunder, including its right to purchase
Shares representing approximately 19.9% of the capital stock or securities
convertible or otherwise exchangeable for capital stock of the Company entitled
to vote generally for the election of the directors of the Company that are
issued and outstanding immediately prior to the exercise of the Option at an
aggregate purchase price equal to the Purchase Price multiplied by 6,470,760.
At any time the Option is then exercisable pursuant to the terms of
Section 1(b) hereof, Parent may elect, in lieu of exercising the Option to
purchase Shares provided in Section 1(a) hereof, to send a written notice to the
Company (the "CASH EXERCISE NOTICE") specifying a date not later than 20
business days and not earlier than 10 business days following the date such
notice is given on which date the Company shall pay to Parent an amount in cash
equal to the Spread (as hereinafter defined) multiplied by all or such portion
of the Shares subject to the Option as Parent shall specify in such Cash
Exercise Notice. As used herein "SPREAD" shall mean the excess, if any, over the
Purchase Price of the higher of (i) if applicable, the highest price per share
of Common Stock (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid or proposed to be paid by any person pursuant to
a definitive agreement executed by the Company with respect to an Acquisition
Proposal (the "ALTERNATIVE PURCHASE PRICE") or (ii) the average closing price,
for the five trading days ending on the trading day immediately preceding the
date of the Cash Exercise Notice, per share of Common Stock as reported on the
New York Stock Exchange (the "CLOSING PRICE"). If the Alternative Purchase Price
includes any property other than cash, the Alternative Purchase Price shall be
the sum of (i) the fixed cash amount, if any, included in the Alternative
Purchase Price plus (ii) the fair market value of such other property. If such
other property consists of securities with an existing public trading market,
the average of the closing prices (or the average of the closing bid and asked
prices if closing prices are unavailable) for such securities in their principal
public trading market on the five trading days ending on the trading day
immediately preceding the date of the Cash Exercise Notice shall be deemed to
equal the fair market value of such property. If such other property consists of
something other than cash or securities with an existing public trading market
and, as of the payment date for the Spread, agreement on the value of such other
property has not been reached between the parties hereto, the Alternative
Purchase Price shall be deemed to equal the Closing Price. Upon exercise of its
right to receive cash pursuant to the exercise of the Option, the obligations of
the Company to deliver
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Shares pursuant to Section 3 shall be terminated with respect to such number of
Shares for which Parent shall have elected to be paid the Spread.
2. Conditions to Delivery of Shares. The Company's obligation to
deliver Shares upon exercise of the Option is subject only to the conditions
that:
(i) No preliminary or permanent injunction or other order
issued by any federal or state court of competent jurisdiction in the United
States prohibiting the delivery of the Shares shall be in effect; and
(ii) Any applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX XXX") shall have expired or been
terminated; and
(iii) All consents, approvals, orders, notifications, filings
or authorizations, the failure of which to make or obtain would have the effect
of making the issuance of Shares to Parent illegal ("OTHER REQUISITE CONSENTS"),
shall have been made or obtained.
3. The Closing.
(a) Any closing hereunder shall take place on the date specified
by Parent in its Stock Exercise Notice or Cash Exercise Notice, as the case may
be, at such reasonable time and place as may be indicated in the Stock Exercise
Notice or the Cash Exercise Notice, as applicable, or at the election of the
Company at 10:00 A.M., local time, at the offices of Weil, Gotshal & Xxxxxx LLP,
000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, or, if the conditions set forth
in Section 2(i), 2(ii) or 2(iii) have not then been satisfied, on the second
business day following the satisfaction of such conditions, or at such other
time and place as the parties hereto may agree (the "CLOSING DATE"). On the
Closing Date, (i) in the event of a closing pursuant to Section 1(c) hereof, the
Company will deliver to Parent a certificate or certificates, duly endorsed (or
accompanied by duly executed stock powers), representing the Shares in the
denominations designated by Parent in its Stock Exercise Notice and Parent will
purchase such Shares from the Company at a cash price per Share equal to the
Purchase Price or (ii) in the event of a closing pursuant to Section 1(d)
hereof, the Company will deliver to Parent cash in an amount determined pursuant
to Section 1(d) hereof. Any payment made by Parent to the Company, or by the
Company to Parent, pursuant to this Stock Option Agreement shall be made by wire
transfer of immediately available funds to a bank designated by the party
receiving such funds.
(b) The certificates representing the Shares may bear an
appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT").
4. Representations and Warranties of the Company. The Company
represents and warrants to Parent that (a) the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland and has the requisite corporate power and authority to enter into and
perform this Stock Option
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Agreement; (b) the execution and delivery of this Stock Option Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Company and this Stock
Option Agreement has been duly and validly executed and delivered by a duly
authorized officer of the Company and will constitute a valid and binding
obligation of the Company subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; (c)
the Company has taken all necessary corporate action to authorize and reserve
the Shares issuable upon exercise of the Option and the Shares, when issued and
delivered by the Company upon exercise of the Option, will be duly authorized,
validly issued, fully paid and non-assessable and free of preemptive rights; (d)
except as otherwise required by the HSR Act or for the Other Requisite Consents,
the execution and delivery of this Stock Option Agreement by the Company and the
consummation by it of the transactions contemplated hereby do not require the
consent, waiver, approval or authorization of or any filing with any person or
public authority and will not violate, result in a breach of or the acceleration
of any obligation under, or constitute a default under, any provision of any
charter or bylaw, indenture, mortgage, lien, lease, agreement, contract,
instrument, order, law, rule, regulation, judgment, ordinance, or decree, or
restriction by which the Company or any of its subsidiaries or any of their
respective properties or assets is bound, except where the failure to obtain
such consent, waiver, approval or authorization or make such filing, or where
such breach, acceleration or default, is not reasonably expected to have a
Material Adverse Effect (as defined in the Merger Agreement) on the Company and
its subsidiaries taken as a whole or on the ability of the Company to consummate
the transactions contemplated hereby; and (e) no "fair price", "moratorium",
"control share acquisition", "interested stockholder" or other form of
antitakeover statute or regulation (including, without limitation, Subtitle 6
(Sections 3-601 through 3-603) and Subtitle 7 (Sections 3-701 through 3-709) of
the Corporation Law of the State of Maryland) is applicable to the acquisition
of Shares pursuant to this Stock Option Agreement.
5. Representations and Warranties of the Parent. Parent represents and
warrants to the Company that (a) Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to enter into and perform this Stock
Option Agreement; (b) the execution and delivery of this Stock Option Agreement
by Parent and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent and this Stock Option Agreement has been duly and validly executed and
delivered by a duly authorized officer of Parent and will constitute a valid and
binding obligation of Parent enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and (c) Parent is acquiring the Option and, if
and when it exercises the Option, will be acquiring the Shares issuable upon the
exercise thereof for its own account and not with a view to distribution or
resale in any manner which would be in violation of the Securities Act.
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6. Listing of Shares; HSR Act Filings; Governmental Consents. Subject
to applicable law and the rules and regulations of the New York Stock Exchange
(or any other national securities exchange or quotation system on which the
Common Stock is then listed) (as applicable, the "STOCK EXCHANGE"), when the
Option becomes exercisable hereunder, the Company will promptly file an
application to list the Shares on the Stock Exchange and will use all reasonable
efforts to effect all necessary filings by the Company under the HSR Act. Each
of the parties hereto will use all reasonable efforts to obtain consents of all
third parties and governmental authorities (including any Other Requisite
Consents), if any, necessary to the consummation of the transactions
contemplated hereby.
7. Registration Rights.
(a) In the event that Parent shall desire to sell any of the
Shares within two years after the purchase of such Shares pursuant hereto, and
such sale requires, in the opinion of counsel to Parent, which opinion shall be
reasonably satisfactory to the Company and its counsel, registration of such
Shares under the Securities Act, the Company will cooperate with Parent and any
underwriters in registering such Shares for resale, including, without
limitation, promptly filing a registration statement which complies with the
requirements of applicable federal and state securities laws, entering into an
underwriting agreement with such underwriters upon such terms and conditions as
are customarily contained in underwriting agreements with respect to secondary
distributions; provided that the Company shall not be required to have declared
effective more than two registration statements hereunder and shall be entitled
to delay the filing or effectiveness of any registration statement for up to 120
days if the offering would, in the good faith judgment of the Board of Directors
of the Company, require premature disclosure of any material corporate
development or otherwise interfere with or adversely affect any pending or
proposed offering of securities of the Company or any other material transaction
involving the Company. Parent shall use its reasonable efforts to cause, and to
cause any underwriters of any sale or disposition to cause, any sale or
disposition pursuant to such registration statement to be effected on a widely
disseminated basis so that upon consummation thereof no purchaser or transferee
will own beneficially more than 5.0% of the then outstanding voting power of the
Company.
(b) If the Common Stock is registered pursuant to the provisions
of this Section 7, the Company agrees (i) to furnish copies of the registration
statement and the prospectus relating to the Shares covered thereby in such
numbers as Parent may from time to time reasonably request and (ii) if any event
shall occur as a result of which it becomes necessary to amend or supplement any
registration statement or prospectus, to prepare and file under the applicable
securities laws such amendments and supplements as may be necessary to keep
available for at least 90 days a prospectus covering the Common Stock meeting
the requirements of such securities laws, and to furnish Parent such numbers of
copies of the registration statement and prospectus as amended or supplemented
as may reasonably be requested. Parent will provide information reasonably
requested by the Company for inclusion in any registration statement to be filed
pursuant to this Section 7. The Company shall bear the cost of the registration,
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including, but not limited to, all registration and filing fees, printing
expenses, and fees and disbursements of counsel and accountants for the Company,
except that Parent shall pay the fees and disbursements of its counsel, and the
underwriting fees and selling commissions applicable to the shares of Common
Stock sold by Parent. In connection with any registration pursuant to this
Section 7, Parent and the Company shall provide each other and each underwriter
of the offering with customary representations, warranties and covenants,
including indemnification and contribution. If a requested registration pursuant
to this Section 7 involves an underwritten offering, the underwriter or
underwriters thereof shall be a nationally recognized firm or firms selected by
the Company, which firm or firms shall be reasonably satisfactory to Parent.
8. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Stock Option Agreement.
9. Specific Performance. The Company acknowledges that if the Company
fails to perform any of its obligations under this Stock Option Agreement
immediate and irreparable harm or injury would be caused to Parent for which
money damages would not be an adequate remedy. In such event, the Company agrees
that Parent shall have the right, in addition to any other rights it may have,
to specific performance of this Stock Option Agreement. Accordingly, if Parent
should institute an action or proceeding seeking specific enforcement of the
provisions hereof, the Company hereby waives the claim or defense that Parent
has an adequate remedy at law and hereby agrees not to assert in any such action
or proceeding the claim or defense that such a remedy at law exists. The Company
further agrees to waive any requirements for the securing or posting of any bond
in connection with obtaining any such equitable relief.
10. Profit Limitation.
(a) Notwithstanding any other provision of this Stock Option
Agreement, in no event shall Parent's Total Profit (as hereinafter defined)
exceed $55,600,000 and, if it otherwise would exceed such amount, Parent, at its
sole election, shall either (a) deliver to the Company for cancellation Shares
previously purchased by Parent, (b) pay cash to the Company or (c) undertake any
combination thereof, so that Parent's Total Profit shall not exceed $55,600,000
after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Stock Option
Agreement, this Option may not be exercised for a number of Shares as would, as
of the date of the Stock Exercise Notice, result in a Notional Total Profit (as
defined below) of more than $55,600,000 and, if exercise of the Option otherwise
would exceed such amount, Parent, at its discretion, may increase the Purchase
Price for that number of Shares set forth in the Stock Exercise Notice so that
the Notional Total Profit shall not exceed $55,600,000; provided, that nothing
in this sentence shall restrict any exercise of the Option permitted hereby on
any subsequent date at the Purchase Price set forth in Section 1(a) hereof.
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(c) As used herein, the term "TOTAL PROFIT" shall mean the
aggregate amount (before taxes) of the following: (i) the amount of cash
received by Parent pursuant to Section 1(d), (ii) (x) the cash amounts or the
fair market value of any property received by Parent pursuant to the sale of
Shares (or any other securities into which such Shares are converted or
exchanged), less (y) Parent's Purchase Price for such Shares, and (iii) any fees
received pursuant to Section 8.5(b) of the Merger Agreement.
(d) As used herein, the term "NOTIONAL TOTAL PROFIT" with
respect to any number of Shares as to which Parent may propose to exercise this
Option shall be the Total Profit determined as of the date of the Stock Exercise
Notice assuming that this Option were exercised on such date for such number of
Shares and assuming that such Shares, together with all other Shares held by
Parent and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).
11. Transfers. The Shares may not be sold, assigned, transferred, or
otherwise disposed of except (i) in an underwritten public offering as provided
in Section 7 hereof or (ii) to any purchaser or transferee who, to Parent's
knowledge, would immediately following such sale, assignment, transfer or
disposal, beneficially own more than 5.0% of the then outstanding voting power
of the Company; provided, however, that Parent shall be permitted to sell any
Shares if such sale is made pursuant to a tender or exchange offer.
12. Notice. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been fully given if
(i) delivered personally; (ii) sent by certified or registered mail, return
receipt requested; (iii) sent by overnight courier for delivery on the next
business day; or (iv) sent by confirmed facsimile, provided that a hard copy of
all such materials is thereafter sent within 24 hours in the manner described in
clauses (i), (ii) or (iii), to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice:
If to Parent:
Texas Instruments Incorporated
0000 Xxxxxxxxx Xxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
X.X. Xxx 000000, X/X 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
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With copies to:
Texas Instruments Incorporated
0000 Xxxxxx Xxxx, X/X 0000
Xxxxxx, Xxxxx 00000
- or -
X.X. Xxx 000000, X/X 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
If to the Company:
Unitrode Corporation
0 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Notices provided in accordance with this Section 12 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (ii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the facsimile transmission, as
the case may be.
13. Parties in Interest. This Stock Option Agreement shall inure to the
benefit of and be binding upon the parties named herein and their respective
successors and permitted assigns; provided, however, that such successor in
interest or permitted assigns shall agree to be bound by the provisions of this
Stock Option Agreement. Nothing in this Stock Option Agreement, express or
implied, is intended to confer upon
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any person other than the Company or Parent, or their successors or assigns, any
rights or remedies under or by reason of this Stock Option Agreement.
14. Entire Agreement; Amendments. This Stock Option Agreement, together
with the Merger Agreement and the other documents referred to therein, contains
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This Stock
Option Agreement may not be changed, amended or modified orally, but may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge may be sought.
15. Assignment. No party to this Stock Option Agreement may assign any
of its rights or obligations under this Stock Option Agreement without the prior
written consent of the other party hereto.
16. Headings. The section headings herein are for convenience only and
shall not affect the construction of this Stock Option Agreement.
17. Counterparts. This Stock Option Agreement may be executed in any
number of counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same document.
18. Governing Law. This Stock Option Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without giving
effect to the choice of law principles thereof.
19. Severability. If any term, provision, covenant or restriction of
this Stock Option Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Stock Option Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
[THIS REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parent and the Company have caused this Stock
Option Agreement to be duly executed and delivered on the day and year first
above written.
TEXAS INSTRUMENTS INCORPORATED
By:
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
UNITRODE CORPORATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
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