EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
January 29, 2005
among
XXX ENTERPRISES, INCORPORATED,
LP ACQUISITION CORP.
and
PULITZER INC.
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS................................................................................. 1
SECTION 1.01 Definitions.......................................................................... 1
ARTICLE 2 THE MERGER.................................................................................. 3
SECTION 2.01 The Merger........................................................................... 3
SECTION 2.02 Effective Time....................................................................... 3
SECTION 2.03 Closing.............................................................................. 3
SECTION 2.04 Effects of the Merger................................................................ 4
SECTION 2.05 Certificate of Incorporation......................................................... 4
SECTION 2.06 By-laws.............................................................................. 4
SECTION 2.07 Directors and Officers............................................................... 4
SECTION 2.08 Company Action....................................................................... 4
ARTICLE 3 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE
OF CERTIFICATES............................................................................. 5
SECTION 3.01 Conversion of Stock................................................................. 5
SECTION 3.02 Payment for Shares in the Merger.................................................... 5
SECTION 3.03 Dissenting Shares................................................................... 7
SECTION 3.04 Stock Options and other Equity Awards............................................... 7
SECTION 3.05 Adjustments......................................................................... 8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 8
SECTION 4.01 Organization and Qualification; Subsidiaries......................................... 8
SECTION 4.02 Capitalization....................................................................... 10
SECTION 4.03 Corporate Authorization.............................................................. 10
SECTION 4.04 Governmental Authorization........................................................... 11
SECTION 4.05 Non-contravention.................................................................... 11
SECTION 4.06 SEC Reports; Financial Statements.................................................... 12
SECTION 4.07 Absence of Certain Changes or Events................................................. 13
SECTION 4.08 Litigation........................................................................... 13
SECTION 4.09 Compliance with Laws................................................................. 13
SECTION 4.10 Taxes................................................................................ 13
SECTION 4.11 Employee Plans....................................................................... 15
SECTION 4.12 Environmental Matters................................................................ 17
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TABLE OF CONTENTS
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SECTION 4.13 Intellectual Property................................................................ 18
SECTION 4.14 Certain Contracts.................................................................... 19
SECTION 4.15 Employment Matters................................................................... 19
SECTION 4.16 Finders' Fees........................................................................ 20
SECTION 4.17 Opinion of Financial Advisor......................................................... 20
SECTION 4.18 Voting Requirements.................................................................. 20
SECTION 4.19 Circulation.......................................................................... 20
SECTION 4.20 Disclaimer........................................................................... 20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...................................... 21
SECTION 5.01 Organization, Standing and Corporate Power........................................... 21
SECTION 5.02 Corporate Authorization.............................................................. 21
SECTION 5.03 Governmental Authorization........................................................... 21
SECTION 5.04 Non-contravention.................................................................... 22
SECTION 5.05 Litigation........................................................................... 22
SECTION 5.06 Financial Capability................................................................. 22
SECTION 5.07 Interested Stockholder............................................................... 22
SECTION 5.08 Solvency............................................................................. 22
ARTICLE 6 COVENANTS................................................................................... 23
SECTION 6.01 Conduct of Business by the Company................................................... 23
SECTION 6.02 Other Actions........................................................................ 25
SECTION 6.03 Stockholder Meeting; Proxy Material.................................................. 25
SECTION 6.04 Access to Information................................................................ 26
SECTION 6.05 No Solicitation; Other Offers........................................................ 27
SECTION 6.06 Best Efforts; Notification........................................................... 29
SECTION 6.07 Indemnification, Advancement and Insurance........................................... 31
SECTION 6.08 Employee Benefits.................................................................... 32
SECTION 6.09 Public Announcements................................................................. 35
SECTION 6.10 Further Assurances................................................................... 35
SECTION 6.11 Notices of Certain Events............................................................ 35
SECTION 6.12 Certain Operational Matters.......................................................... 36
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TABLE OF CONTENTS
(continued)
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SECTION 6.13 Solvency Opinion...................................................................... 37
ARTICLE 7 CONDITIONS TO THE MERGER.................................................................... 37
SECTION 7.01 Conditions to Obligations of Each Party.............................................. 37
SECTION 7.02 Conditions to Obligations of Parent and Purchaser.................................... 37
SECTION 7.03 Conditions to Obligation of the Company.............................................. 38
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER........................................................... 39
SECTION 8.01 Termination.......................................................................... 39
SECTION 8.02 Effect of Termination................................................................ 41
SECTION 8.03 Fees and Expenses.................................................................... 41
SECTION 8.04 Amendment............................................................................ 41
SECTION 8.05 Extension; Waiver.................................................................... 41
ARTICLE 9 MISCELLANEOUS............................................................................... 42
SECTION 9.01 Non-Survival of Representations and Warranties....................................... 42
SECTION 9.02 Notices.............................................................................. 42
SECTION 9.03 No Waivers........................................................................... 43
SECTION 9.04 Successors and Assigns............................................................... 43
SECTION 9.05 Governing Law........................................................................ 43
SECTION 9.06 Jurisdiction......................................................................... 43
SECTION 9.07 WAIVER OF JURY TRIAL................................................................. 43
SECTION 9.08 Counterparts; Effectiveness; Benefit................................................. 44
SECTION 9.09 Entire Agreement..................................................................... 44
SECTION 9.10 Severability......................................................................... 44
SECTION 9.11 Specific Performance................................................................. 44
SECTION 9.12 Interpretation....................................................................... 44
SECTION 9.13 Company Disclosure Memorandum........................................................ 45
SECTION 9.14 Personal Liability................................................................... 45
SECTION 9.15 Obligations of Parent and the Company................................................ 45
SECTION 9.16 Certain Definitions.................................................................. 45
ANNEX A
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of January 29,
2005, among Pulitzer Inc., a Delaware corporation (the "Company"), Xxx
Enterprises, Incorporated, a Delaware corporation ("Parent"), and LP Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent
("Purchaser").
RECITALS:
WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company have determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company on the terms and conditions set
forth herein, and the Boards of Directors of the Company and the Purchaser have
declared this Agreement advisable; and
WHEREAS, to effectuate the acquisition, it is proposed that the Purchaser
be merged with and into the Company, with the Company continuing as the
surviving corporation in the merger (the "Merger"), on the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions. Each of the following terms is defined in the
Section set forth opposite such term.
Term Section
---- --------
Acquisition Proposal............................................................ 9.16(a)
Adverse Recommendation Change................................................... 6.05(c)
Affiliate....................................................................... 9.16(b)
Agreement....................................................................... Preamble
Beneficially.................................................................... 9.16(c)
Business Day.................................................................... 9.16(d)
Certificates.................................................................... 3.02
Class B Common Stock............................................................ 3.01(a)
Code............................................................................ 4.11(b)
Common Stock.................................................................... 3.01(a)
Company......................................................................... Preamble
Company Common Stock............................................................ 3.01(a)
Company Designee................................................................ 6.12(d)
Company Disclosure Memorandum................................................... Article 4 Preamble
Company Employees............................................................... 6.08(a)
Company Group................................................................... 4.10(b)
Company Intellectual Property Rights............................................ 4.13(c)
Term Section
---- --------
Company RSU..................................................................... 3.04
Company SEC Reports............................................................. 4.06(a)
Company Securities.............................................................. 4.02(b)
Company Stock Option............................................................ 3.04
Company Stock Plans............................................................. 6.08(g)
Company Stockholder Meeting..................................................... 6.03(a)
Confidentiality Agreement....................................................... 6.04
Control......................................................................... 9.16(b)
Corporate Agent................................................................. 6.07(a)
Cutoff Date..................................................................... 6.05(b)
December Financial Statements................................................... 4.10(a)
Delaware Law.................................................................... 2.08
Designation Committee........................................................... 6.12(d)
Dissenting Share................................................................ 3.03
DOJ............................................................................. 6.06(b)
Effective Time.................................................................. 2.02
Eligible Company Retirees....................................................... 6.08(e)
Employee Plans.................................................................. 4.11(a)
Environmental Laws.............................................................. 4.12(b)
Environmental Permits........................................................... 4.12(b)
ERISA........................................................................... 4.11(a)
ERISA Affiliate................................................................. 4.11(c)
Exchange Act.................................................................... 4.04
Filing Office................................................................... 2.02
FTC............................................................................. 6.06(b)
GAAP............................................................................ 4.06(b)
Xxxxxxx, Xxxxx Fairness Opinion................................................. 4.17
Governmental Entity............................................................. 4.04
Hazardous Waste................................................................. 4.12(b)
HSR Act......................................................................... 4.04
Indemnified Party............................................................... 6.07(a)
Intellectual Property Right..................................................... 4.13(c)
IRS............................................................................. 4.10(b)
Knowledge....................................................................... 9.16(e)
Liens........................................................................... 4.01
Material Adverse Effect......................................................... 4.01
Material Contracts.............................................................. 4.14
Merger.......................................................................... Recitals
Merger Consideration............................................................ 3.01(a)
Multiemployer Plan.............................................................. 4.11(a)
Other Enterprise................................................................ 6.07(a)
Parent.......................................................................... Preamble
Paying Agent.................................................................... 3.02(a)
Payment Fund.................................................................... 3.02(a)
PCBs............................................................................ 4.12(a)
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Term Section
---- --------
PD LLC.......................................................................... 6.12(c)
Permits......................................................................... 4.09
Person.......................................................................... 9.16(f)
Proxy Statement................................................................. 4.04
Purchaser....................................................................... Preamble
Required Vote................................................................... 4.18
SEC............................................................................. 4.04
Section 203..................................................................... 2.08
Section 262..................................................................... 3.03
Securities Act.................................................................. 4.06(a)
SERP............................................................................ 6.08(g)
SERP Schedule................................................................... 6.08(g)
Significant Subsidiaries........................................................ 9.16(g)
Solvent......................................................................... 9.16(h)
Subsidiary...................................................................... 4.01
Superior Proposal............................................................... 9.16(i)
Surviving Corporation........................................................... 2.01
Tax Return...................................................................... 4.10(h)
Taxes........................................................................... 4.10(h)
Taxing Authority................................................................ 4.10(h)
Termination Fee................................................................. 8.03(b)
Transactions.................................................................... 2.08
Voting Trust Agreement.......................................................... 4.02(d)
ARTICLE 2
THE MERGER
SECTION 2.01 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement, Purchaser shall be merged with and
into the Company in accordance with applicable law, whereupon the separate
existence of Purchaser shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
SECTION 2.02 Effective Time. As soon as practicable after satisfaction or,
to the extent permitted hereunder, waiver of all conditions to the Merger set
forth in Article 7, the Company and Purchaser will file a certificate of merger,
in the form of Annex A attached hereto, with the Office of the Secretary of
State of the State of Delaware (the "Filing Office") and make all other filings
or recordings required by applicable law in connection with the Merger. The
Merger shall become effective at such time (the "Effective Time") as the
certificate of merger is duly filed with the Filing Office or at such later time
as the parties hereto may agree upon and specify in the certificate of merger.
SECTION 2.03 Closing. The closing of the Merger will take place at 10:00
a.m. on a date to be specified by the parties, which shall be no later than the
second Business Day after satisfaction or waiver of the conditions set forth in
Article 7 (other than those conditions that by their nature are to be satisfied
at the closing, but subject to the fulfillment or waiver of
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those conditions), at the offices of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless the parties agree to another time, date
or place in writing.
SECTION 2.04 Effects of the Merger. From and after the Effective Time, the
Surviving Corporation shall possess all the rights, powers, privileges and
franchises and be subject to all of the obligations, liabilities, restrictions
and disabilities of the Company and Purchaser, all as provided under applicable
law.
SECTION 2.05 Certificate of Incorporation. The certificate of
incorporation of the Surviving Corporation shall be amended as a result of the
Merger to be substantially similar to the certificate of incorporation of the
Purchaser immediately prior to the Effective Time until amended in accordance
with applicable law, except that Article First thereof shall read as follows:
"The name of the corporation is Pulitzer Inc."
SECTION 2.06 By-laws. The by-laws of the Purchaser at the Effective Time
shall be the by-laws of the Surviving Corporation until amended in accordance
with applicable law.
SECTION 2.07 Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (a) the directors of Purchaser at the Effective Time shall be
the directors of the Surviving Corporation and (b) the officers of the Purchaser
at the Effective Time shall be the officers of the Surviving Corporation. If
requested by Parent, the Company shall deliver the resignations of its directors
and officers of the Company and its Subsidiaries effective as of the Effective
Time.
SECTION 2.08 Company Action. The Company hereby represents and warrants
that its Board of Directors, at a meeting duly called and held on January 29,
2005, acting by unanimous vote, has (a) determined that this Agreement and the
transactions contemplated hereby, including the Merger (collectively, the
"Transactions"), are advisable and fair to and in the best interests of the
Company and the Company's stockholders and declared this Agreement advisable and
that the Merger Consideration to be paid for the Company Common Stock is fair to
the holders of such shares, (b) approved and adopted this Agreement and the
Transactions, including the Merger, which, assuming the truth and accuracy of
the representation of Parent and Purchaser in Section 5.07 hereof, makes
inapplicable to this Agreement and the Transactions the restrictions on
"business combinations" set forth in Section 203 ("Section 203") of the General
Corporation Law of the State of Delaware (the "Delaware Law") or any similar
restrictions set forth in any certificate of incorporation, by-law, voting trust
or other agreement as to which the Company or any of its Subsidiaries is a party
without any further action on the part of the stockholders or the Board of
Directors of the Company, (c) resolved to recommend that the stockholders of the
Company vote to approve and adopt this Agreement and the Merger, (d) determined
that no other state takeover statute is applicable to the Transactions and (e)
determined that the consummation of the Transactions does not constitute an
unpermitted transfer of any Company Securities under the Company's certificate
of incorporation. Copies of the Board of Directors resolutions confirming such
actions have been provided to Parent. Notwithstanding the foregoing, such
recommendation may be withdrawn, modified or amended as permitted by Section
6.05.
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ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
SECTION 3.01 Conversion of Stock. At the Effective Time, by virtue of the
Merger and without any other action on the part of the holder thereof:
(a) each share of the Company's common stock, $.01 par value (the "Common
Stock"), and each share of the Company's Class B common stock, $.01 par value
(the "Class B Common Stock" and, together with the Common Stock, the "Company
Common Stock"), outstanding immediately prior to the Effective Time shall,
except as otherwise provided in Section 3.01(b) or as provided in Section 3.03
with respect to shares as to which appraisal rights have been demanded, be
converted into the right to receive from the Surviving Corporation, in cash,
without interest, an amount equal to $64.00 per share (the "Merger
Consideration"), as provided in Section 3.02;
(b) each share of Company Common Stock held by the Company or any of its
Subsidiaries as treasury stock or owned by Parent or any Subsidiary of Parent
immediately prior to the Effective Time shall be canceled and no payment shall
be made with respect thereto; and
(c) each share of common stock of Purchaser outstanding immediately prior
to the Effective Time shall be converted into and become one share of common
stock of the Surviving Corporation with the same rights and powers as the shares
so converted and shall constitute the only outstanding shares of capital stock
of the Surviving Corporation.
SECTION 3.02 Payment for Shares in the Merger. (a) Prior to the mailing of
the Proxy Statement, Parent shall appoint an agent (the "Paying Agent")
reasonably acceptable to the Company for the purpose of exchanging certificates
(the "Certificates") representing shares of the Company Common Stock for the
Merger Consideration. At the Effective Time, Parent or Purchaser shall deposit
with the Paying Agent, in trust for the benefit of the Company's stockholders,
cash in immediately available funds sufficient to pay the Merger Consideration
to be paid in respect of each share of Company Common Stock (such cash being
hereinafter referred to as the "Payment Fund"); provided, however, that no such
deposit shall relieve Parent or Purchaser of its obligation to pay the aggregate
Merger Consideration pursuant to Section 3.01(a). The Payment Fund shall not be
used for any other purpose. The Payment Fund shall be invested by the Paying
Agent as directed by Parent or the Surviving Corporation pending payment thereof
by the Paying Agent to the holders of the Certificates. Earnings from such
investment shall be the sole and exclusive property of Parent and the Surviving
Corporation, and no part of such earnings shall accrue to the benefit of holders
of Certificates. For purposes of determining the amount of the Payment Fund to
be made available, Parent shall assume that no holder of shares of Company
Common Stock will demand appraisal rights with respect to such shares.
(b) As soon as practicable after the Effective Time, Parent will cause the
Paying Agent to send to each holder of shares of Company Common Stock at the
Effective Time (other
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than holders of Certificates referred to in Section 3.01(b) or Section 3.03) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title shall pass, only upon proper delivery of the Certificates
to the Paying Agent and will be in such form and have such other provisions as
Parent and the Company reasonably specify) and instructions for use in effecting
the surrender of Certificate(s) for payment therefor.
(c) Each holder of shares of Company Common Stock that have been converted
into the right to receive the Merger Consideration will be entitled to receive,
upon surrender to the Paying Agent of a Certificate, together with a properly
completed letter of transmittal, the Merger Consideration in respect of each
share of Company Common Stock represented by such Certificate. Until so
surrendered, each such Certificate shall represent after the Effective Time for
all purposes only the right to receive such Merger Consideration. No interest
will be paid or will accrue on the Merger Consideration payable upon surrender
of any Certificate.
(d) If any portion of the Payment Fund is to be paid to a Person other
than the Person in whose name a surrendered Certificate is registered, it shall
be a condition to such payment that the Certificate so surrendered shall be
properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Paying Agent any transfer or
other Taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Paying Agent that such Tax has been paid or is not payable. Each of the
Surviving Corporation and Parent shall be entitled to deduct and withhold from
the consideration otherwise payable to any Person pursuant to this Article 3
such amounts as it is required to deduct and withhold with respect to the making
of such payment under any provision of federal, state, local or foreign Tax law.
If the Surviving Corporation or Parent, as the case may be, so withholds
amounts, such amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Company Common Stock in respect
of which the Surviving Corporation or Parent, as the case may be, made such
deduction and withholding.
(e) 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 Paying Agent will pay, in exchange for
such lost, stolen or destroyed Certificate, the Merger Consideration to be paid
in respect of each share of Company Common Stock represented by such
Certificate, as contemplated by this Article.
(f) After the Effective Time, the stock transfer books of the Company
shall be closed and there shall be no further registration of transfers of
shares of Company Common Stock. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged for
the Merger Consideration to be paid in respect of each share of Company Common
Stock represented by such Certificate, as provided for, and in accordance with
the procedures set forth, in this Article 3.
(g) Any portion of the Payment Fund (and any interest or other income
earned thereon) that remains unclaimed by the holders of shares of Company
Common Stock one year after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has
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not exchanged each share of Company Common Stock for the Merger Consideration in
accordance with this Section 3.02 prior to that time shall thereafter look only
to the Surviving Corporation for payment of the Merger Consideration in respect
of each such share without any interest thereon. Notwithstanding the foregoing,
neither the Paying Agent nor any party hereto shall be liable to any holder of
shares of Company Common Stock for any amount paid to a public official pursuant
to applicable abandoned property, escheat or similar laws. Any amounts remaining
unclaimed by holders of shares of Company Common Stock three years after the
Effective Time (or such earlier date immediately prior to such time when the
amounts would otherwise escheat to or become property of any Governmental
Entity) shall become, to the extent permitted by applicable law, the property of
Parent free and clear of any claims or interest of any Person previously
entitled thereto. The Surviving Corporation shall pay all charges and expenses
of the Paying Agent.
SECTION 3.03 Dissenting Shares. Each share of Company Common Stock that is
issued and outstanding immediately prior to the Effective Time and that is held
by a holder who has not voted such share in favor of the Merger, who shall have
delivered a written demand for appraisal of such share in the manner provided by
Delaware Law and who, as of the Effective Time, shall not have effectively
withdrawn or lost such right to appraisal (each such share, a "Dissenting
Share") shall not be converted into a right to receive the Merger Consideration.
The holders thereof shall be entitled only to such rights as are granted by
Section 262 of the Delaware Law ("Section 262"). Each holder of Dissenting
Shares who becomes entitled to payment for such shares pursuant to Section 262
shall receive payment therefor from the Surviving Corporation in accordance with
Delaware Law; provided, however, that (i) if any such holder of Dissenting
Shares shall have failed to establish his or her entitlement to appraisal rights
as provided in Section 262, (ii) if any such holder of Dissenting Shares shall
have effectively withdrawn his or her demand for appraisal of such shares or
lost his or her right to appraisal and payment for shares under Section 262 or
(iii) if neither any holder of Dissenting Shares nor the Surviving Corporation
shall have filed a petition demanding a determination of the value of all
Dissenting Shares within the time provided in Section 262, such holder shall
forfeit the right to appraisal of such shares and each such share shall be
treated as if it had been converted, as of the Effective Time, into a right to
receive the Merger Consideration, without interest thereon, from the Surviving
Corporation. The Company shall give Parent prompt notice of any demands received
by the Company for appraisal of shares of Company Common Stock, and Parent shall
have the right to participate in all negotiations and proceedings with respect
to such demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands.
SECTION 3.04 Stock Options and other Equity Awards. Immediately prior to
the Effective Time, the Company shall cause each then outstanding option to
purchase Company Common Stock (a "Company Stock Option") and each then
outstanding restricted stock unit (a "Company RSU") granted under the Company's
equity compensation plans to be converted into the right to receive a cash
payment which, in the case of a Company Stock Option, shall be equal to the
product of (i) the excess, if any, of the Merger Consideration per share of
Company Common Stock over the exercise price per share, and (ii) the number of
shares of Company Common Stock covered by the Company Stock Option, and, in the
case of a Company RSU, shall be equal to the Merger Consideration per share of
Company Common Stock covered by the Company RSU. The Company shall make such
payments at the Effective Time or make
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appropriate arrangements to have such payments made as soon as practicable after
the Effective Time, subject to applicable income and employment Tax withholding.
At the Effective Time, any previously outstanding Company Stock Option which
shall not have been exercised or converted into cash or the right to receive
cash will be terminated. Immediately prior to the Effective Time, any then
outstanding restricted shares of Company Common Stock held under the Company's
equity compensation plans shall be fully vested and shall be subject to the
provisions of Section 3.01 of this Agreement.
SECTION 3.05 Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of the Company shall occur by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or stock dividend thereon or other similar event with a record date
during such period, the Merger Consideration and any other amounts payable
pursuant to this Agreement shall be appropriately adjusted.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure memorandum delivered by the Company
to Parent on the date hereof and attached hereto (the "Company Disclosure
Memorandum") (it being understood and agreed that any matter disclosed in a
section of the Company Disclosure Memorandum shall be treated as if it were
disclosed in other sections of the Company Disclosure Memorandum to which it
reasonably applies) or in the Company SEC Reports filed prior to the date
hereof, the Company represents and warrants to Parent and Purchaser as follows:
SECTION 4.01 Organization and Qualification; Subsidiaries. Each of the
Company and its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and has the
requisite power and authority to carry on its business as now being conducted.
Each of the Company and its Subsidiaries is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on the Company. As used in this
Agreement, "Material Adverse Effect" means, except as otherwise provided in
Sections 7.02, 7.03 and 8.01(d)(i), any change, effect, event, occurrence or
state of facts (or any development that has had or is reasonably likely to have
any change or effect) that is, individually or in the aggregate, materially
adverse to the business, property, assets, liabilities, financial condition or
results of operations of Parent or any of its Subsidiaries, in the case of
Parent, or the Company or any of its Significant Subsidiaries, in the case of
the Company, or which would prevent or materially delay the consummation of the
Transactions; provided, however, that none of the following shall be deemed in
themselves, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been, a
Material Adverse Effect: (i) any adverse change in the market price or trading
volume of the capital stock of such Person after the date hereof; provided,
however, that this clause (i) shall not exclude any underlying event,
occurrence, development or circumstance which may have caused such change in
stock price or
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trading volume; (ii) any adverse event, occurrence or development affecting any
of the industries in which such Person operates generally (to the extent that
such events, occurrences or developments do not disproportionately affect such
Person as compared to other companies in such industries); (iii) changes, events
or occurrences in financial, credit, banking or securities markets (including
any disruption thereof); (iv) any adverse change, event, development or effect
arising from or relating to general business or economic conditions (including
the business of Parent or any of its Subsidiaries, in the case of Parent, and
the Company or any of its Significant Subsidiaries, in the case of the Company)
which does not relate only to Parent or any of its Subsidiaries, in the case of
Parent, or the Company or any of its Significant Subsidiaries, in the case of
the Company; (v) any adverse change, event, development or effect attributable
to the announcement or pendency of the Transactions, or resulting from or
relating to compliance with the terms of, or the taking of any action required
by, this Agreement; (vi) any adverse change, event, development or effect
arising from or relating to national or international political or social
conditions, including the engagement by the United States in hostilities or the
escalation thereof, whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist attack anywhere
in the world; and (vii) any adverse change, event, development or effect arising
from or relating to laws, rules, regulations, orders or other binding directives
issued by any Governmental Entity that do not relate only to Parent or any of
its Subsidiaries, in the case of Parent, or the Company or any of its
Significant Subsidiaries, in the case of the Company. The term "Subsidiary,"
with respect to any Person, means any corporation or other legal entity of which
such Person Controls (either alone or through or together with any other
Subsidiary), directly or indirectly, more than 50% of the capital stock or other
ownership interests the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such corporation
or other legal entity. The Company Disclosure Memorandum lists each Subsidiary
of the Company. The Company has made available to Parent complete and correct
copies of its certificate of incorporation and by-laws and the certificates of
incorporation and by-laws (or comparable charter documents) of its Subsidiaries,
in each case as amended to the date hereof. Except as set forth in the Company
Disclosure Memorandum, all of the outstanding shares of capital stock or other
ownership interests of each Subsidiary have been validly issued and are fully
paid and nonassessable and owned by the Company, by another Subsidiary of the
Company or by the Company and another such Subsidiary, free and clear of all
material pledges, claims, liens, charges, encumbrances and security interests of
any kind or nature whatsoever (collectively, "Liens"), and free of any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests, except for restrictions imposed by
applicable securities laws. Except as set forth in the Company Disclosure
Memorandum, there are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other ownership interests in any Subsidiary of the Company or (ii) options or
other rights to acquire from the Company or any of its Subsidiaries, or other
obligation of the Company or any of its Subsidiaries to issue, any capital stock
or other ownership interests in, or any securities convertible into or
exchangeable for any capital stock or other ownership interests in, any
Subsidiary of the Company. Except as set forth in the Company Disclosure
Memorandum, and except for ownership of less than 1% in any publicly traded
company and the capital stock or other ownership interests of its Subsidiaries,
the Company does not own, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, joint venture or other
entity.
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SECTION 4.02 Capitalization. (a) The authorized capital stock of the
Company consists of 300,000,000 shares of common stock, $.01 par value per
share, of which 100,000,000 shares have been designated as Common Stock and
100,000,000 shares have been designated as Class B Common Stock, and 100,000,000
shares of preferred stock, $.01 par value per share. As of December 26, 2004
there were outstanding: (i) 10,044,697 shares of Common Stock, of which 5,137
shares were held by the Company in its treasury; (ii) 11,660,942 shares of Class
B Common Stock; (iii) Company Stock Options to purchase an aggregate of
2,486,132 shares of Common Stock; and (iv) Company RSUs for an aggregate of
139,680 shares of Common Stock. Since December 26, 2004, there have been no
issuances of shares of the capital stock of the Company or any other securities
of the Company except (A) in connection with the satisfaction of Company RSUs or
the exercise of Company Stock Options outstanding on such date, (B) issuances of
shares of Common Stock upon conversion of shares of Class B Common Stock
outstanding on such date or (C) purchases pursuant to any employee stock
purchase plan. All shares of Company Common Stock outstanding as of the date
hereof have been duly authorized and validly issued and are fully paid and
nonassessable and not subject to preemptive rights. All shares of Company Common
Stock issuable in connection with the satisfaction of Company RSUs, the exercise
of outstanding Company Stock Options, purchases pursuant to any employee stock
purchase plan or conversion of outstanding shares of Class B Common Stock have
been duly authorized and, when issued in accordance with the terms thereof, will
be validly issued and will be fully paid and nonassessable.
(b) Except as described in Section 4.02(a), there are no outstanding (i)
shares of capital stock or voting securities of the Company, (ii) securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company or (iii) options or other rights to acquire
from the Company or other obligation of the Company to issue or sell, or cause
to be issued or sold, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company (the items in clauses (i), (ii) and (iii) being referred to collectively
as the "Company Securities"). Except as contemplated by this Agreement and the
Voting Trust Agreement, there are no outstanding obligations of the Company or
any of its Subsidiaries to (1) repurchase, redeem or otherwise acquire any of
the Company Securities, (2) vote or dispose of any shares of capital stock of
the Company or any of its Subsidiaries, (3) register any Company Securities
under the Securities Act or any state securities law or (4) grant preemptive or
anti-dilutive rights with respect to any Company Securities. Without limiting
the generality of the foregoing, neither the Company nor any of its Subsidiaries
has adopted a stockholder rights plan.
(c) There are no bonds, debentures, notes or other indebtedness of the
Company having the right to vote (or convertible into securities having the
right to vote) on any matters on which stockholders of the Company may vote.
(d) Except for the Pulitzer Inc. Voting Trust Agreement, dated as of March
18, 1999 (the "Voting Trust Agreement"), there are no voting trusts or other
agreements or understandings to which the Company or any of its Subsidiaries is
a party with respect to the voting of the capital stock of the Company.
SECTION 4.03 Corporate Authorization. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to the
stockholders of the
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Company adopting this Agreement at the Company Stockholder Meeting, to
consummate the Transactions. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Transactions
have been duly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Transactions, subject
to approval and adoption of this Agreement by the Company's stockholders. This
Agreement has been duly executed and delivered by the Company and (assuming that
this Agreement constitutes a valid and binding agreement of Parent and
Purchaser) constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
SECTION 4.04 Governmental Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any federal,
state or local government or any court, administrative agency, commission or
other governmental authority or agency, domestic or foreign, or the Financial
Accounting Standards Board (a "Governmental Entity"), is required by or with
respect to the Company or any of its Subsidiaries or, to the Knowledge of the
Company, TNI Partners in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the Transactions,
except for (a) the filing of a premerger notification and report form by the
Company and the trustees under the Voting Trust Agreement under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and expiration or termination of the waiting period thereunder and
filings pursuant to similar applicable competition, merger control, antitrust or
other laws, (b) the filing with the Securities and Exchange Commission (the
"SEC") of (i) a proxy statement relating to the Company Stockholder Meeting (as
amended or supplemented from time to time, the "Proxy Statement"), and (ii) such
reports under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and the
Transactions, (c) the filing of the certificate of merger with the Filing Office
and appropriate documents with the relevant authorities of other states in which
the Company is qualified to do business, (d) in connection with any state or
local Tax which is attributable to the beneficial ownership of the Company's or
its Subsidiaries' real property, if any, (e) as may be required by any
applicable state securities or "blue sky" laws or state takeover laws, (f) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or the Transactions and (g) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.05 Non-contravention. The execution and delivery of this
Agreement by the Company do not and, subject to obtaining stockholder adoption
of this Agreement, performance by the Company of this Agreement and the
consummation of the Transactions will not (a) contravene, conflict with, or
result in any violation or breach of any provision of the certificate of
incorporation or by-laws of the Company or similar organizational documents of
any of its Subsidiaries or, to the Knowledge of the Company, TNI Partners, (b)
assuming compliance with the matters referred to in Section 4.04, contravene,
conflict with, or result in a violation or breach of any provision of any
applicable law, regulation, judgment, injunction,
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order or decree, (c) require any consent or other action by any Person under,
constitute a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries or, to the Knowledge of
the Company, TNI Partners is entitled under any provision of any agreement or
other instrument binding upon the Company or any of its Subsidiaries or TNI
Partners or any license, franchise, permit, certificate, approval or other
similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries and TNI Partners or (d) result in
the creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries or, to the Knowledge of the Company, TNI Partners, except, in the
case of clauses (b), (c) and (d), for such matters as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.06 SEC Reports; Financial Statements. (a) The Company has timely
filed all required registration statements, prospectuses, reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
since January 1, 2003 (the "Company SEC Reports"), and since January 1, 2003,
the Company has not made any request for confidential treatment of any
information. As of their respective dates, the Company SEC Reports (i) were
prepared (and, those filed after the date hereof, will be prepared) in
accordance and (ii) complied (and, those filed after the date hereof, will
comply) as to form in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Reports, and none of the Company SEC
Reports contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except as disclosed in the Company SEC Reports filed prior to
the date hereof, the Company has no relationships and related transactions
required to be set forth in Item 404 of Regulation S-K of the SEC. No Subsidiary
of the Company is subject to the periodic reporting requirements of the Exchange
Act.
(b) The financial statements of the Company included in the Company SEC
Reports filed after January 1, 2003 (including the notes thereto) comply in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") (except, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and present fairly, in all
material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to year-end audit adjustments consistent with past
practice).
(c) Except as and to the extent set forth in the December Financial
Statements or the Company Disclosure Memorandum, and except for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice which would not have, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company,
neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether or not accrued, absolute, contingent or
otherwise).
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SECTION 4.07 Absence of Certain Changes or Events. Since December 26,
2004, except as set forth in the Company Disclosure Memorandum or the Company
SEC Reports filed prior to the date hereof, (a) the Company, its Subsidiaries
and, to the Knowledge of the Company, TNI Partners have conducted their business
only in the ordinary course consistent with past practice and there have not
occurred any events, changes, effects or developments that have had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and (b) neither the Company nor any of its
Significant Subsidiaries has taken any action that, if taken during the period
from the date of this Agreement through the Effective Time, would constitute a
material breach of Section 6.01.
SECTION 4.08 Litigation. Except as disclosed in the Company Disclosure
Memorandum or the Company SEC Reports filed prior to the date hereof, there is
no suit, action or proceeding pending or, to the Knowledge of the Company,
threatened in writing against or affecting the Company, any of its Subsidiaries
or TNI Partners that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on the Company, nor is there any
judgment, decree, injunction, rule or order of or, to the Knowledge of the
Company, any investigation or review pending or threatened by any Governmental
Entity or arbitrator outstanding against, or with respect to, in each case the
Company, any of its Subsidiaries or TNI Partners having, or which, insofar as
reasonably can be foreseen, in the future would have, any such effect.
SECTION 4.09 Compliance with Laws. The respective businesses of the
Company, its Subsidiaries and, to the Knowledge of the Company, TNI Partners are
being conducted in compliance with all applicable statutes, laws, ordinances,
regulations, rules, judgments, decrees and orders of any Governmental Entity
applicable to their respective businesses or operations, except for instances of
noncompliance that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company (provided that no
representation or warranty is made in this Section 4.09 with respect to
Environmental Laws). Each of the Company, its Subsidiaries and, to the Knowledge
of the Company, TNI Partners holds and has in effect all federal, state, local
and foreign governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary for it
to own, lease or operate its properties and assets and to carry on its business
as now conducted, except for the lack of Permits which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company. Neither the Company, any of its Subsidiaries nor, to the Knowledge
of the Company, TNI Partners is in default under any Permit, except for defaults
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on the Company.
SECTION 4.10 Taxes. (a) Except as provided in the Company Disclosure
Memorandum, (i) the Company, each of its Subsidiaries and, to the Knowledge of
the Company, TNI Partners has filed or will file (or has had filed or will have
filed on its behalf) prior to or as of the Effective Time all material Tax
Returns which it has been or will be required to file prior to or as of the
Effective Time and has paid or will pay (or has had paid or will have paid on
its behalf) prior to or as of the Effective Time all Taxes required to be paid
by the Company, each of its Subsidiaries and TNI Partners as shown on such Tax
Returns, prior to or as of the Effective Time, except for Taxes being contested
in good faith by the Company, any of its Subsidiaries or TNI Partners; (ii) the
most recent financial statements contained in the Company SEC Reports
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and the financial statements of the Company as of and for the period ended
December 26, 2004 included in Section 4.06 of the Company Disclosure Memorandum
(the "December Financial Statements") reflect an adequate provision in
accordance with GAAP for all Taxes payable by the Company, any of its
Subsidiaries or, to the Knowledge of the Company, TNI Partners (limited to the
extent of Star Publishing Company's allocable share of TNI Partners' liability
for Taxes) accrued through the date of such financial statements; (iii) neither
the Company, any of its Subsidiaries nor, to the Knowledge of the Company, TNI
Partners has waived any statute of limitations in respect of the assessment and
collection of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency; and (iv) there are no material assessments or
adjustments that have been asserted in writing against the Company, any of its
Subsidiaries or, to the Knowledge of the Company, TNI Partners for any period
for which the Company has not made appropriate provision in accordance with GAAP
in the most recent financial statements contained in the Company SEC Reports and
the December Financial Statements.
(b) All Tax Returns filed prior to or as of the Effective Time by or on
behalf of the Company and its Subsidiaries and, to the Knowledge of the Company,
TNI Partners are, or will be at the time of filing, true and complete in all
material respects, and neither the Company nor, while a member of the
consolidated group of corporations of which the Company is the common parent
(the "Company Group"), any of its Subsidiaries or, to the Knowledge of the
Company, TNI Partners has engaged in any "listed transactions" identified by the
Internal Revenue Service (the "IRS") in Notice 2004-67 or any subsequent IRS
Notice identifying "listed transactions."
(c) Except as provided in the Company Disclosure Memorandum, the
consolidated federal income Tax Returns filed by the Company and its
Subsidiaries and, to the Knowledge of the Company, TNI Partners for all Tax
years ended on or before December 31, 2000 either (i) have been examined and
settled with the IRS, or (ii) the applicable statutes of limitation for the
assessment of federal income Taxes for such Tax years have expired.
(d) There are no material Liens or encumbrances for Taxes on any assets of
the Company, any of its Subsidiaries or, to the Knowledge of the Company, TNI
Partners other than Liens for Taxes not yet due and payable.
(e) The Company and, while a member of the Company Group, each of its
Subsidiaries and, to the Knowledge of the Company, TNI Partners has complied in
all material respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes.
(f) Except as provided in the Company Disclosure Memorandum, no federal,
state, local or foreign examinations, audits or administrative proceedings are
pending with regard to any material Taxes or Tax Return of the Company, any of
its Subsidiaries or, to the Knowledge of the Company, TNI Partners and neither
the Company, any of its Subsidiaries nor, to the Knowledge of the Company, TNI
Partners has received a written notice proposing the conduct of any such
examination, audit or proceeding.
(g) Except as set forth in the Company Disclosure Memorandum, there are no
Tax sharing, allocation or similar agreements in effect as between the Company
or any predecessor or Affiliate thereof and any other Person (including any
stockholder of the Company, in the
-14-
capacity of a stockholder, and any of such stockholder's predecessors or
Affiliates) under which the Parent, the Company, any of its Subsidiaries or, to
the Knowledge of the Company, TNI Partners or any stockholder could be liable
for any Taxes or other claims of such other Person.
(h) As used herein,
(i) "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, estimated taxes, social security, retirement,
unemployment, occupation, use, goods and services, service use, license, value
added, capital, net worth, payroll, profits, withholding, franchise, business,
unclaimed property, escheat, transfer and recording taxes, fees and charges, and
any other taxes, assessments or similar charges imposed by the IRS or any taxing
authority (whether domestic or foreign, including any state, county, local or
foreign government or any subdivision or taxing agency thereof (including a
United States possession)) (a "Taxing Authority"), whether computed on a
separate, consolidated, unitary, combined or any other basis; and such term
shall include any interest whether paid or received, fines, penalties or
additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments; and
(ii) "Tax Return" shall mean any report, return, document, declaration or
other information or filing required to be supplied to any Taxing Authority or
jurisdiction (foreign or domestic) with respect to Taxes, including information
returns, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information.
SECTION 4.11 Employee Plans. (a) Section 4.11 of the Company Disclosure
Memorandum lists each "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), other
than a "multiemployer plan" within the meaning of Section 3(37) of ERISA
("Multiemployer Plan"), whether or not subject to ERISA, and each other
employment, severance, incentive, retention, change in control or other material
compensatory plan, policy, agreement or arrangement and the maximum liability of
the Company and its Subsidiaries and, to the Knowledge of the Company, TNI
Partners thereunder that (i) is maintained or contributed to by the Company, any
of its Subsidiaries or TNI Partners and (ii) covers any director, employee or
former employee of the Company, any of its Subsidiaries or TNI Partners
(collectively, the "Employee Plans"). Subject to data protection or other law
concerning the disclosure of personal data, the Company has made available to
Parent copies of the Employee Plans (and, if applicable, related trust
agreements or other funding arrangements) and all amendments thereto.
(b) Each Employee Plan (and with respect to TNI Partners, to the Knowledge
of the Company) that is intended to qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), meets, in all material respects,
the applicable requirements of the Code and is covered by a determination letter
issued by the IRS after January 1, 1994 with respect to each plan and trust and
each amendment thereto or such plan and trust and/or amendment are covered under
the remedial amendment period provided under Code Section 401(b). Each Employee
Plan (and with respect to TNI Partners, to the Knowledge of the Company) has
been
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administered in compliance with its terms and with the requirements of
applicable law, including but not limited to ERISA, the Code and applicable case
law, and the Company has received no notice from any Governmental Entity
questioning such plan's compliance with applicable law, except where the failure
to so administer would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
(c) With respect to any Employee Plan covered by Title I of ERISA (and
with respect to TNI Partners, to the Knowledge of the Company), no non-exempt
transaction prohibited by Section 406 of ERISA or Section 4975 of the Code has
occurred which will cause the Company or TNI Partners to incur a liability under
ERISA or the Code that would reasonably be expected to have a Material Adverse
Effect on the Company. No "accumulated funding deficiency," as defined in
Section 412 of the Code (and with respect to TNI Partners, to the Knowledge of
the Company), has been incurred with respect to any Employee Plan subject to
such Section 412, whether or not waived. No "reportable event," within the
meaning of Section 4043 of ERISA, other than a "reportable event" for which the
30-day notice period has been waived, that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company (and
with respect to TNI Partners, to the Knowledge of the Company), has occurred in
connection with any Employee Plan that is subject to Title IV of ERISA. Neither
the Company nor any entity that, together with the Company, would be treated as
a single employer under Section 414 of the Code (an "ERISA Affiliate") (and with
respect to TNI Partners, to the Knowledge of the Company) has engaged in a
transaction described in Sections 4069 or 4212(c) of ERISA or has incurred, or
reasonably expects to incur prior to the Effective Time, any liability under
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered by Title IV of ERISA that could
become a liability of the Company, Parent or any ERISA Affiliate after the
Effective Time, other than a liability that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. Without limiting the foregoing, the minimum employer contributions
required by law (and with respect to TNI Partners, to the Knowledge of the
Company) have been made with respect to each Employee Plan.
(d) There has been (and with respect to TNI Partners, to the Knowledge of
the Company) no failure of any Employee Plan which is a group health plan (as
defined in Section 5000(b)(1) of the Code) to meet the requirements of Code
Section 4980B(f) with respect to a qualified beneficiary (as defined in Section
4980B(g)), other than a failure that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(e) Except as set forth in the Company Disclosure Memorandum or as set
forth in this Agreement, no director, employee or former employee of the Company
or any Subsidiary thereof or, to the Knowledge of the Company, TNI Partners will
become entitled to any material bonus, retirement, severance, retention, change
in control or similar benefit (including acceleration of vesting or exercise of
an incentive award) as a result of the Transactions, and there is no contract,
plan, program or arrangement covering any employee or former employee of the
Company or any Subsidiary thereof or, to the Knowledge of the Company, TNI
Partners that, individually or collectively, would reasonably be expected to
give rise to a payment that would not be deductible by Parent, the Company or
any Subsidiary thereof or TNI Partners by reason of Section 280G of
-16-
the Code as a result of the Transactions or as a result of termination of
employment in connection therewith.
(f) With respect to each Employee Plan, where applicable, the Company or,
to the Knowledge of the Company, TNI Partners has provided, made available or
will make available upon request to Parent, true and complete copies of (i) the
most recent IRS Form 5500 filing (including, if applicable, Schedule B thereto),
(ii) the most recent financial statement, and (iii) the most recent actuarial
report and Form PBGC-1 filing.
(g) Section 4.11(g) of the Company Disclosure Memorandum lists each
Multiemployer Plan to which the Company, any of its Subsidiaries or, to the
Knowledge of the Company, TNI Partners is required to contribute. Neither the
Company, any of its Subsidiaries nor, to the Knowledge of the Company, TNI
Partners has incurred a liability under Title IV of ERISA with respect to a
Multiemployer Plan (including, without limitation, liability resulting from a
complete or partial withdrawal) which has not been satisfied and which would
reasonably be expected to have a Material Adverse Effect on the Company.
(h) Except as provided in the Company Disclosure Memorandum, the Company
and, to the Knowledge of the Company, TNI Partners has made no promises,
representations or affirmations to participants or retirees in relation to
ongoing retiree health benefits that would give rise to binding obligations.
(i) Section 4.11 of the Company Disclosure Memorandum lists and, to the
Knowledge of the Company, with respect to TNI Partners, each "voluntary
employees beneficiary association" (within the meaning of Section 501(c)(9) of
the Code) and since March 18, 1999, there have been no other "welfare benefit
funds" relating to employees or former employees within the meaning of Section
419 of the Code.
SECTION 4.12 Environmental Matters. (a) Except as set forth in the Company
Disclosure Memorandum or as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company:
(i) since March 18, 1999, no written notice, demand, request for
information, citation, summons or order has been received, and no penalty has
been assessed, which (a) alleges a violation by the Company or any Significant
Subsidiary or, to the Knowledge of the Company, TNI Partners of any
Environmental Law, (b) requires the investigation or remediation of any
Hazardous Waste by the Company or any Significant Subsidiary or, to the
Knowledge of the Company, TNI Partners, or (c) alleges the Company or any of its
Significant Subsidiaries is liable, or potentially liable, for any
investigation, remediation or response costs under any Environmental Law;
(ii) no action, suit, proceeding or, to the Knowledge of the Company,
investigation is pending or, to the Knowledge of the Company, threatened by any
Governmental Entity which alleges a violation by the Company or any Significant
Subsidiary or TNI Partners of any Environmental Law;
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(iii) to the Knowledge of the Company, the Company and its Significant
Subsidiaries and TNI Partners are in compliance with all applicable
Environmental Laws and all Environmental Permits; and
(iv) in connection with the real property owned or leased by the Company
or any of its Significant Subsidiaries or, to the Knowledge of the Company, TNI
Partners, or to the Knowledge of the Company with respect to any real property
formerly owned or leased by the Company or any of its Significant Subsidiaries
or TNI Partners, (A) no release, emission, or discharge into the environment of
hazardous materials has occurred since March 18, 1999 or is presently occurring
in reportable quantities under any Environmental Law and (B) since March 19,
1999 no Hazardous Waste, including polychlorinated biphenyls ("PCBs"), has been
disposed of by the Company or its Significant Subsidiaries or TNI Partners or
any other Person except in compliance with applicable Environmental Laws.
(b) As used herein,
(i) "Environmental Laws" means any federal, state, local or foreign law,
regulation, rule, order or decree, in each case as in effect on the date hereof,
relating to pollution, protection of the environment, regulation or control of
Hazardous Wastes;
(ii) "Environmental Permits" means all permits, licenses, certificates or
approvals necessary for the operations of the Company or any of its Significant
Subsidiaries or TNI Partners as currently conducted to comply with all
applicable Environmental Laws; and
(iii) "Hazardous Waste" shall mean any substance or material defined or
classified as a "hazardous substance," "hazardous waste," "hazardous material"
or toxic substance under any Environmental Law.
SECTION 4.13 Intellectual Property. (a) (i) No Company Intellectual
Property Right is subject to any outstanding judgment, injunction, order, decree
or, to the Knowledge of the Company, agreement, restricting the use thereof by
the Company or any of its Significant Subsidiaries or, to the Knowledge of the
Company, TNI Partners or restricting the licensing thereof by the Company or any
of its Significant Subsidiaries or TNI Partners to any Person, except for any
judgment, injunction, order, decree or agreement which would not reasonably be
expected to have a Material Adverse Effect on the Company; (ii) since December
26, 2004, neither the Company, any of its Significant Subsidiaries nor, to the
Knowledge of the Company, TNI Partners has been a party to any action, suit,
investigation or proceeding relating to, or, to the Knowledge of the Company,
otherwise has been notified of, any alleged claim of infringement of any
Intellectual Property Right of any other Person; and (iii) the Company and its
Significant Subsidiaries and, to the Knowledge of the Company, TNI Partners have
no outstanding claim or suit for any continuing infringement by any other Person
of any Company Intellectual Property Rights and, to the Knowledge of the
Company, no Person is infringing the rights of the Company or any of its
Significant Subsidiaries or TNI Partners with respect to any Company
Intellectual Property Right.
(b) Each of the Company and its Subsidiaries and, to the Knowledge of the
Company, TNI Partners owns or is validly licensed or otherwise has the right to
use all Company
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Intellectual Property Rights used in the conduct of its business, except where
the failure to own or possess such rights would not, individually or in the
aggregate, reasonably expected to have a Material Adverse Effect on the Company.
(c) As used herein,
(i) "Company Intellectual Property Rights" means all Intellectual Property
Rights owned by or licensed to and used or held for use by the Company or any of
its Significant Subsidiaries or TNI Partners; and
(ii) "Intellectual Property Right" means any trademark, service xxxx,
corporate name and trade name, mask work, invention, patent, trade secret,
copyright, know-how (including any registrations or applications for
registration of any of the foregoing), customer list or any other similar type
of proprietary intellectual property right.
SECTION 4.14 Certain Contracts. Except as set forth in the Company SEC
Reports filed prior to the date hereof or the Company Disclosure Memorandum,
neither the Company, any of its Significant Subsidiaries nor, to the Knowledge
of the Company, TNI Partners is a party to or bound by any "material contracts"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or
"definitive material agreement" (as such term is defined in Item 1.01 of Form
8-K of the SEC) ("material contracts" and "definitive material agreement" are
collectively, "Material Contract(s)"). Section 4.14 of the Company Disclosure
Memorandum lists any contract, agreement or other arrangement involving an
executory obligation for the sale or trade of advertising during the term
thereof of more than $2,000,000 to which the Company or any of its Subsidiaries
or, to the Knowledge of the Company, TNI Partners is a party. All of the
contracts, agreements or other arrangements of the Company and its Subsidiaries
and, to the Knowledge of the Company, TNI Partners (a) for the purchase of
newsprint from the suppliers thereof which are material and (b) of any agent or
consultant retained by the Company or any of its Subsidiaries or TNI Partners to
advise them in the purchase of newsprint are listed in Section 4.14 of the
Company Disclosure Memorandum. There is no Material Contract as to which either
the Company or any of its Significant Subsidiaries or, to the Knowledge of the
Company, TNI Partners is in material violation or default. Neither the Company,
any of its Subsidiaries nor, to the Knowledge of the Company, TNI Partners has
received written notice from any third party alleging that the Company or any of
its Subsidiaries or TNI Partners is in violation of or in default under (nor
does there exist any condition which upon the passage of time or the giving of
notice would cause such a violation of or default under) any Material Contract,
except for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on the
Company.
SECTION 4.15 Employment Matters. As of the date hereof, except as set
forth on the Company Disclosure Memorandum, there are no work stoppages,
strikes, collective labor grievances, other collective bargaining disputes,
charges or claims of unfair labor practices pending or to the Knowledge of the
Company threatened against the Company or its Significant Subsidiaries or, to
the Knowledge of the Company, TNI Partners which would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. The Company Disclosure Memorandum sets forth all labor agreements,
collective bargaining
-19-
agreements and similar agreements or arrangements to which the Company or any of
its Significant Subsidiaries or, to the Knowledge of the Company, TNI Partners
is a party. The Company and its Significant Subsidiaries and, to the Knowledge
of the Company, TNI Partners are in compliance in all material respects with
applicable labor law. Except as set forth in the Company Disclosure Memorandum,
to the Knowledge of the Company as of the date hereof, there are no
organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company or any of its Subsidiaries
or TNI Partners.
SECTION 4.16 Finders' Fees. Except for Xxxxxxx, Xxxxx & Co. and Huntleigh
Securities Corporation, copies of whose engagement agreements have been provided
to Parent, there is no investment banker, broker or finder that has been
retained by or is authorized to act on behalf of the Company or any of its
Subsidiaries or, to the Knowledge of the Company, TNI Partners who is entitled
to any fee or commission from the Company or any of its Subsidiaries or TNI
Partners in connection with the Transactions. The Company and TNI Partners, to
the Knowledge of the Company, are not obligated or committed to pay the legal
fees or related expenses of any stockholder or employee of the Company in
connection with this Agreement and the Transactions, other than as disclosed in
the Company Disclosure Memorandum or as required by the Company's Restated
Certificate of Incorporation (as to which, to the Knowledge of the Company, no
claims are pending or threatened).
SECTION 4.17 Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxxx, Sachs & Co. (the "Xxxxxxx, Xxxxx Fairness Opinion"), dated
as of the date of this Agreement, to the effect that, as of the date of this
Agreement, the Merger Consideration is fair to the holders of Company Common
Stock from a financial point of view. A complete and correct signed copy of such
opinion will be delivered to Parent as soon as practicable after the date of
this Agreement and such opinion shall not have been withdrawn.
SECTION 4.18 Voting Requirements. The affirmative vote of the holders of a
majority of the aggregate voting power of the outstanding shares of Common Stock
and Class B Common Stock, voting together as a single class, adopting this
Agreement is the only vote of the holders of any class or series of the
Company's capital stock necessary, under applicable law or otherwise, to adopt
this Agreement (the "Required Vote").
SECTION 4.19 Circulation. For each of the publications of the Company's
Significant Subsidiaries and TNI Partners subject to the Audit Bureau of
Circulations, the circulation as reported by the Audit Bureau of Circulations
for the periods ended March 2004 and September 2004 (or, if such other dates,
the two most recent available periods) (with respect to TNI Partners, to the
Knowledge of the Company) is true and correct in all material respects.
SECTION 4.20 Disclaimer. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY STATED IN ARTICLE 4 OF THIS AGREEMENT, THE COMPANY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01 Organization, Standing and Corporate Power. Each of Parent
and Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and Purchaser is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed (individually or in the aggregate) would
not reasonably be expected to have a Material Adverse Effect on Parent.
Purchaser was formed solely for the purpose of engaging in the Transactions and
since the date of its formation has engaged in no activities other than in
connection with or as contemplated by this Agreement or in connection with
arranging any financing required to consummate the Transactions.
SECTION 5.02 Corporate Authorization. Parent and Purchaser have all
requisite corporate power and authority to enter into this Agreement and to
consummate the Transactions. The Board of Directors of Purchaser has declared
advisable this Agreement. The execution, delivery and performance of this
Agreement, and the consummation of the Transactions, in each case by Parent
and/or Purchaser, as the case may be, have been duly authorized by all necessary
corporate action on the part of Parent and Purchaser and no other corporate
proceedings on the part of the Parent or Purchaser are necessary to authorize
this Agreement or to consummate the Transactions (subject, in the case of
Purchaser, to approval and the execution and delivery to Purchaser by Parent, as
the sole stockholder of Purchaser, of a unanimous written consent adopting this
Agreement). This Agreement has been duly executed and delivered by Parent and
Purchaser and (assuming that this Agreement constitutes a valid and binding
agreement of the Company) constitutes a valid and binding obligation of each
such party, enforceable against each such party in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
SECTION 5.03 Governmental Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent, Purchaser or any other
Subsidiary of Parent in connection with the execution and delivery of this
Agreement by Parent and Purchaser or the consummation by Parent and Purchaser of
the Transactions, except for (a) the filing of a premerger notification and
report form under the HSR Act and expiration or termination of the waiting
period thereunder and filings pursuant to similar applicable competition, merger
control, antitrust or other laws, (b) the filing with the SEC of such reports
under the Exchange Act as may be required in connection with this Agreement and
the Transactions, (c) the filing of the certificate of merger with the Filing
Office and appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business, (d) as may be required by any
applicable state securities or "blue sky" laws or state takeover laws and (e)
such other consents, approvals, orders,
-21-
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent or Purchaser.
SECTION 5.04 Non-contravention. The execution and delivery of this
Agreement by Parent and Purchaser do not and performance by Parent and Purchaser
of this Agreement and the consummation by Parent and Purchaser of the
Transactions will not (a) contravene, conflict with, or result in any violation
or breach of any provision of the certificate of incorporation or by-laws of
Parent or Purchaser, (b) assuming compliance with the matters referred to in
Section 5.03, contravene, conflict with or result in a violation or breach of
any provision of any applicable law, regulation, judgment, injunction, order or
decree or (c) require any consent or other action by any Person under,
constitute a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which Parent or Purchaser is entitled under any provision of any
agreement or other instrument binding upon Parent or Purchaser, except, in the
case of clauses (b) and (c), for such matters as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent or Purchaser or materially impair the ability of Parent or Purchaser to
consummate the Transactions on the terms and conditions provided for herein.
SECTION 5.05 Litigation. There is no suit, action or proceeding pending
or, to the Knowledge of Parent or Purchaser, threatened in writing against or
affecting the Parent, any Subsidiary of Parent or Purchaser that would
reasonably be expected to prevent or substantially delay any of the Transactions
or otherwise materially impair the ability of the Parent or Purchaser to
consummate the Transactions on the terms and conditions provided for herein, nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Parent or Purchaser or any other
Subsidiary of Parent having, or which, insofar as reasonably can be foreseen, in
the future would have, any such effect.
SECTION 5.06 Financial Capability. Parent has, and shall cause Purchaser
to have, sufficient funds to consummate the Transactions, including payment in
full for all shares of Company Common Stock (on a fully-diluted basis)
outstanding at the Effective Time and to pay all fees and expenses related to
the Transactions.
SECTION 5.07 Interested Stockholder. Neither Parent nor any of its
affiliates or associates (as each such term is defined in Section 203) was, at
any time from January 1, 2001 until the execution and delivery of this
Agreement, an "interested stockholder" (as such term is defined in Section 203)
of the Company.
SECTION 5.08 Solvency. Parent and Purchaser are not entering into the
Transactions with actual intent to hinder, delay or defraud either present or
future creditors. Immediately following the Effective Time and after giving
effect to the Transactions, the financing thereof and the transactions
contemplated or required by the financing thereof, Parent, the Surviving
Corporation and their Subsidiaries will each be Solvent, assuming that the
Company and its Subsidiaries are Solvent immediately prior to the Effective
Time.
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ARTICLE 6
COVENANTS
SECTION 6.01 Conduct of Business by the Company. From the date hereof
until the Effective Time, the Company shall, and shall cause its Subsidiaries
to, conduct their business in the ordinary course consistent with past practice
and use their commercially reasonable efforts to preserve intact their business
organizations and relationships with third parties. Without limiting the
generality of the foregoing, except with the consent of Parent, as expressly
contemplated or permitted by this Agreement, or as set forth in Section 6.01 of
the Company Disclosure Memorandum, from the date hereof until the Effective Time
the Company shall not, and shall not permit any of its Subsidiaries to:
(a) declare, set aside or pay any dividend or other distribution with
respect to any share of its capital stock, other than (i) regular quarterly cash
dividends on the outstanding Common Stock and Class B Common Stock consistent
with past practice in an amount no greater than $0.20 per share per quarter and
(ii) dividends and other distributions paid by any Subsidiary of the Company to
the Company or any other Subsidiary of the Company;
(b) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, except as permitted under Section
6.01(d);
(c) repurchase, redeem or otherwise acquire any shares of capital stock or
other securities of, or other ownership interests in, the Company or any of its
Subsidiaries;
(d) issue any shares of Company Common Stock, or any securities
convertible into or exercisable or exchangeable for shares of Company Common
Stock, or any rights, warrants or options to acquire any shares of Company
Common Stock, other than (i) issuances pursuant to Company Stock Options or
Company RSUs that are outstanding on the date hereof, (ii) issuances pursuant to
any employee stock purchase plan as permitted under Section 6.08(g) and (iii)
the issuance of shares of Common Stock upon conversion of shares of Class B
Common Stock;
(e) amend its certificate of incorporation or by-laws or other comparable
organizational documents or amend any material terms of the outstanding
securities of the Company or its Subsidiaries;
(f) acquire or agree to acquire (i) by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, joint venture, association or
other business organization or division thereof, (ii) any assets that are
material, individually or in the aggregate, to the Company and its Subsidiaries
taken as a whole or (iii) except for acquisitions which individually or in the
aggregate do not exceed $500,000, any home delivery, single copy or other type
of distribution business involving the Company or any of its Subsidiaries'
circulation operations;
(g) except in the ordinary course of business consistent with past
practice, sell, lease, license, mortgage or otherwise encumber or subject to any
Lien (other than (i) Liens arising out of Taxes not yet due and payable or which
are being contested in good faith by appropriate
-23-
proceedings, (ii) materialmen's, mechanics', carrier's, workmen's, repairmen's,
warehousemen's or other like Liens, (iii) Liens or minor imperfections of title
that do not materially impair the continued use and operation of the assets to
which they relate and (iv) with respect to leased property, the terms and
conditions of the respective leases) or otherwise dispose of any of its
properties or assets which are material, individually or in the aggregate, to
the Company and its Subsidiaries taken as a whole;
(h) except for the items currently contracted for by the Company or any of
its Subsidiaries at the date hereof or listed in Section 6.01(h) of the Company
Disclosure Memorandum, make or agree to make any new capital expenditure or
expenditures other than those which are individually not in excess of $35,000;
(i) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person (other than its Subsidiaries), issue or sell any
debt securities or warrants or other rights to acquire any debt securities, or
guarantee any debt securities of another Person (other than its Subsidiaries),
except pursuant to written commitments existing at the date hereof and except
for the endorsement of checks and the extension of credit in the normal course
of business, or make any loans (other than as permitted under any qualified
retirement plan set forth in Section 4.11 of the Company Disclosure Memorandum),
advances or capital contributions to, or investments in, any other Person, other
than (i) any of its Subsidiaries, (ii) advances to employees in accordance with
past practice or (iii) pursuant to written commitments existing at the date
hereof;
(j) except as required under any existing collective bargaining agreement
or as may be mutually agreed upon between Parent and the Company, enter into or
adopt any new, or increase benefits under, amend, modify or renew or terminate
any existing, Employee Plan or benefit arrangement or any collective bargaining
agreement, other than as required by law or regulation;
(k) except to the extent required by any existing collective bargaining
agreement or by written agreements existing on the date of this Agreement and
disclosed in the Company Disclosure Memorandum, increase the wages, salaries or
bonus compensation payable or to become payable to its directors, officers,
management personnel or employees not covered by a collective bargaining
agreement, other than in accordance with budgets approved by the Company and
existing on the date hereof or as mutually agreed upon by Parent and the
Company;
(l) enter into any (i) contracts of employment, retention or similar
agreement or (ii) severance provisions except for those which do not exceed
$150,000 in the aggregate;
(m) adopt any change in its accounting policies, procedures or practices
other than as required by the SEC, GAAP, by law or regulation or by the Public
Company Accounting Oversight Board;
(n) make any Tax election that is material to the Company and its
Subsidiaries taken as a whole or settle or compromise any income Tax liability
that is material to the Company and its Subsidiaries taken as a whole, except
for (i) any income Tax liability for which the Company
-24-
has made appropriate provision in accordance with GAAP in the December Financial
Statements and (ii) the settlement of the matters described in Section 4.10 of
the Company Disclosure Memorandum on the basis specified therein;
(o) except as otherwise expressly contemplated or permitted by this
Section 6.01, (i) enter into any contract or agreement that is material to the
Company or any of its Significant Subsidiaries, (ii) modify, amend or terminate
or, except with respect to advertising contracts whose term is one year or less,
renew any contract or agreement to which the Company or any of its Significant
Subsidiaries is a party that is material to the Company or any of its
Significant Subsidiaries, (iii) increase the single copy or home delivery prices
of the St. Louis Post-Dispatch or (iv) develop new or alter existing products
including newspaper redesign, zoning, editioning and other related activities;
provided that Parent shall not unreasonably withhold consent to any of the
actions described in subsections (i) and (ii) above;
(p) agree to settle (i) any litigation listed in the Company Disclosure
Memorandum except as expressly contemplated in Section 6.01(p) of the Company
Disclosure Memorandum and except for settlements of not greater than $250,000
individually or $1,000,000 in the aggregate, or (ii) any litigation commenced
after the date of this Agreement against the Company, any of its Subsidiaries or
any of its directors by any stockholder of the Company relating to the Merger,
Merger Consideration, this Agreement or the Transactions, without the prior
written consent of Parent, which consent will not be unreasonably withheld;
(q) with respect to each funded Employee Plan, make any contributions
required to be made by the Company and any of its Subsidiaries in excess of the
minimum amount required by ERISA or the Code; or
(r) agree or commit to do any of the foregoing.
SECTION 6.02 Other Actions. The Company, Parent and Purchaser shall not,
and shall not permit any of their respective Subsidiaries to, knowingly take any
action that would, or that could reasonably be expected to, result in (i) any of
their respective representations and warranties set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue so as
to have a Material Adverse Effect or (iii) any of the conditions to the Merger
set forth in Article 7 not being satisfied (subject to the Company's right to
take action specifically permitted by Section 6.05). Promptly following the
execution and delivery of this Agreement, Parent, as the sole stockholder of
Purchaser, shall execute and deliver a unanimous written consent adopting this
Agreement.
SECTION 6.03 Stockholder Meeting; Proxy Material. Subject to Section 6.05:
(a) The Company shall cause a meeting of its stockholders (the "Company
Stockholder Meeting") to be duly called and held as soon as reasonably
practicable for the purpose of voting on the adoption of this Agreement. At the
Company Stockholder Meeting, Parent shall cause all of the shares of Company
Common Stock then owned Beneficially or of record by Parent, Purchaser or any of
their Subsidiaries to be voted in favor of the adoption of
-25-
this Agreement and shall include in the Proxy Statement a recommendation of the
Board of Directors that the stockholders of the Company vote to approve and
adopt this Agreement.
(b) The Company will use reasonable efforts to prepare and file on or
before March 12, 2005 a preliminary Proxy Statement with the SEC and will use
its commercially reasonable efforts to respond to any comments of the SEC or its
staff and to cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement and all amendments and supplements
thereto, prior to their being filed with the SEC. The Company will notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If at any time prior to the Company Stockholder Meeting
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company will promptly prepare and mail to
its stockholders such an amendment or supplement.
(c) None of the information supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement or any amendment thereof or
supplement thereto will, at the time the Proxy Statement or any amendment
thereof or supplement thereto is first mailed to the Company's 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, except that no
representation, warranty or covenant is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Purchaser for inclusion or incorporation by reference
therein. The Proxy Statement will be prepared in accordance with and comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder.
(d) None of the information supplied by Parent or Purchaser for inclusion
or incorporation by reference in the Proxy Statement or any amendment thereof or
supplement thereto will, at the time the Proxy Statement or any amendment
thereof or supplement thereto is first mailed to the Company's 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, except that no
representation, warranty or covenant is made by Parent or Purchaser with respect
to statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference therein.
SECTION 6.04 Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement
dated as of October 11, 2004 between the Company and Parent (the
"Confidentiality Agreement"), the Company shall (i) give Parent, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, contracts, books and records and personnel of
the Company and its Subsidiaries, (ii) furnish to Parent, its counsel, financial
advisors, auditors and
-26-
other authorized representatives such financial and operating data and other
information relating to the Company and its Subsidiaries as such Persons may
reasonably request, (iii) instruct the employees, counsel, financial advisors,
auditors and other authorized representatives of the Company and its
Subsidiaries to cooperate with Parent in its investigation of the Company and
its Subsidiaries, (iv) for the period commencing as of December 27, 2004 and for
each four or five-week period thereafter through the Effective Time, deliver to
Parent no later than the twelfth Business Day after the end of each period an
unaudited, consolidated balance sheet for the Company and its Subsidiaries for
the portion of the fiscal year ended as of the end of such period, and (v)
deliver to Parent (A) a draft of the Company's Annual Report on Form 10-K for
the fiscal year ended December 26, 2004, within one day after the Audit
Committee of the Company's Board of Directors reviews such draft and (B)
contemporaneously with the filing of the Company's Annual Report on Form 10-K,
true and complete copies of the audited consolidated statements of the financial
position of the Company and its Subsidiaries as of December 26, 2004 and
December 28, 2003 and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 26, 2004, included as part of the Annual Report on Form 10-K
filed with the SEC on or prior to the date of required filing with the SEC,
which shall present fairly, in all material respects, the financial position of
the Company at December 26, 2004 and December 28, 2003 and the results of their
operations and their cash flows for each of the three years in the period ended
December 26, 2004, in conformity with GAAP and which shall not reflect any
material adverse change from the December Financial Statements. Said audited
consolidated financial statements shall be accompanied by the opinion of
Deloitte & Touche LLP, the Company's independent public accountants, or such
other independent public accountants of national standing acceptable to Parent,
if Deloitte & Touche LLP has resigned or been dismissed prior to the completion
thereof, that the consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 26, 2004
and December 28, 2003, and the results of their operations and their cash flows
for each of the three years in the period ended December 26, 2004, in conformity
with GAAP. Any investigation pursuant to this Section shall be conducted upon
two Business Days' prior written notice to the Company, during regular business
hours and in such a manner so as not to interfere unreasonably with the conduct
of the business of the Company and its Subsidiaries. No investigation conducted
pursuant to this Section shall affect or be deemed to modify any representation
or warranty made in this Agreement. Except as required by law, Parent will hold,
and will cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence all documents and
information concerning the Company or any of its Subsidiaries furnished to
Parent or its Affiliates in connection with the Transactions in accordance with
the terms of the Confidentiality Agreement.
SECTION 6.05 No Solicitation; Other Offers. (a) From the date hereof until
the earlier of the Effective Time and the termination of this Agreement in
accordance with Article 8, the Company and its Subsidiaries shall not, nor shall
they permit any of their Affiliates to, nor shall they authorize any of the
officers, directors, employees, investment bankers, consultants and other agents
and Affiliates of the Company and its Subsidiaries to, directly or indirectly,
(i) solicit, initiate, encourage, induce or knowingly facilitate (including by
way of furnishing information) the submission of any Acquisition Proposal or any
inquiries with respect thereto, (ii) engage in discussions or negotiations with
any Person concerning an Acquisition Proposal or knowingly facilitate any effort
or attempt to make an Acquisition Proposal or accept an Acquisition Proposal or
(iii) disclose any nonpublic information relating to the Company or any
-27-
of its Subsidiaries to any Person who, to the Knowledge of the Company, is
making or considering making, or who has made, an Acquisition Proposal. The
Company will notify Parent as promptly as practicable (but in no event later
than 24 hours) after receipt by the Company of any Acquisition Proposal or any
request for nonpublic information relating to the Company or any of its
Subsidiaries by any Person who, to the Knowledge of the Company, is making or
considering making or who has made, an Acquisition Proposal. The Company shall
provide such notice orally and in writing and shall identify the Person making,
and the terms and conditions of, any such Acquisition Proposal or request. The
Company shall keep Parent informed of the status and details (including
amendments or proposed amendments) of any such Acquisition Proposal or request.
The Company shall, and shall cause its Subsidiaries and the directors, employees
and other agents of the Company and its Subsidiaries to, cease immediately and
cause to be terminated all activities, discussions and negotiations, if any,
with any Persons conducted prior to the date hereof with respect to any
Acquisition Proposal and, to the extent within its power, to recover or cause to
be destroyed all information concerning the Company and its Subsidiaries in the
possession of such Persons and their Affiliates, representatives and advisors.
(b) Notwithstanding the first sentence of Section 6.05(a), the Company
may, until the Company Stockholder Meeting (the "Cutoff Date"), negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any Person in response to an unsolicited Acquisition Proposal by
such Person if (i) the Company has complied with the terms of this Section 6.05,
(ii) the Board of Directors of the Company determines in good faith that such
Acquisition Proposal could reasonably be expected to result in a Superior
Proposal and, after consultation with and receipt of advice from outside legal
counsel, that the failure to take such action could reasonably be deemed to
constitute a breach of its fiduciary duties under applicable law, and (iii) such
Person executes a confidentiality agreement with terms no less favorable to the
Company than those contained in the Confidentiality Agreement (including the
standstill provisions unless the Company shall have amended the Confidentiality
Agreement to modify the standstill provisions therein to be no more restrictive
of Parent than such Person is restricted pursuant to such confidentiality
agreement). The Company shall provide Parent any information regarding the
Company or its Subsidiaries provided to any Person making an Acquisition
Proposal which was not previously provided to Parent. Nothing contained in this
Agreement shall prevent the Company or its Board of Directors from complying
with Rule 14d-9, Item 1012(a) of Regulation M-A and Rule 14e-2 under the
Exchange Act with respect to any Acquisition Proposal or making any disclosure
to the Company's stockholders required by applicable law or regulation.
(c) Except as permitted in this Section 6.05(c), neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or publicly propose to withdraw or modify, in a manner adverse to Parent, or
take any action not explicitly permitted by this Agreement that would be
inconsistent with its approval of this Agreement and the Merger or with the
recommendation to stockholders referred to in Section 2.08 hereof, (ii) approve
or recommend, or publicly propose to approve or recommend, any Acquisition
Proposal or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or similar agreement related to
any Acquisition Proposal. Notwithstanding the foregoing, prior to the Cutoff
Date, the Board of Directors of the Company shall be permitted not to recommend
to its stockholders approval and adoption of this Agreement and the Merger, or
to
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withdraw, or modify in a manner adverse to Parent, its recommendation to its
stockholders referred to in Section 2.08 hereof (each, an "Adverse
Recommendation Change"), but only if (i) the Company has complied with the terms
of this Section 6.05, (ii) the Company has received an unsolicited Acquisition
Proposal which the Board of Directors determines in good faith constitutes a
Superior Proposal, (iii) the Board of Directors of the Company determines in
good faith, after consultation with and receipt of advice from outside legal
counsel, that the failure to take such action could reasonably be deemed to be
inconsistent with its fiduciary duties under applicable law, (iv) the Company
shall have delivered to Parent a prior written notice advising Parent that it
intends to take such action, together with a full and complete copy of the
Superior Proposal at least three Business Days prior to the Adverse
Recommendation Change (it being understood and agreed that any amendment to the
financial terms or any other material terms of such Superior Proposal shall
require a new notice and a new three-Business Day period), (v) the Company shall
have negotiated in good faith with Parent during such three-Business Day period
to make such amendments to the terms and conditions of this Agreement as would
enable the Board of Directors of the Company to proceed with its recommendation
of this Agreement (as so amended) and the Merger and not make the Adverse
Recommendation Change, and (vi) prior to the expiration of such three-Business
Day period, Parent fails to make a proposal to adjust the terms and conditions
of this Agreement that the Board of Directors of the Company determines in good
faith (after consultation with its financial advisors) to be at least as
favorable as the Superior Proposal.
(d) During the period from the date of this Agreement until the Effective
Time or earlier termination of this Agreement, the Company shall not terminate,
amend, modify or waive any provision of any confidentiality or standstill
agreement relating to an Acquisition Proposal to which it or any of its
Subsidiaries is a party (other than any involving Parent or its Subsidiaries).
During such period, the Company agrees to enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreement, including
obtaining injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
or any state thereof having jurisdiction.
SECTION 6.06 Best Efforts; Notification. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
its best efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other Transactions,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
avoid an action or proceeding by any Governmental Entity, (ii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
Transactions, including, without limitation, seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the Transactions and to fully carry out the
purposes of this Agreement. In connection with and without limiting the
foregoing, the Company and its Board of Directors shall, if any state takeover
statute or similar statute or regulation is or becomes applicable to the
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Merger, this Agreement or the other Transactions, use their best efforts to
ensure that the Merger and the other Transactions may be consummated as promptly
as practicable on the terms set forth in this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
Transactions. Nothing herein shall limit or affect the Company's taking actions
specifically permitted by Section 6.05.
(b) In furtherance of and without limiting the above provisions, each of
the Company and Parent shall, as promptly as practicable following the execution
and delivery of this Agreement (but in no event more than the tenth Business Day
thereafter), file with the United States Federal Trade Commission (the "FTC")
and the United States Department of Justice (the "DOJ") the notification and
report form required for the Transactions and any supplemental information
requested in connection therewith pursuant to the HSR Act. Any such notification
and report form and supplemental information shall be in substantial compliance
with the requirements of the HSR Act. Each of the Company and Parent shall
furnish to the other such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission
which is necessary under the HSR Act. The Company and Parent shall keep each
other apprised of the status of any communications with, and any inquiries or
requests for additional information from, the FTC or the DOJ, and shall comply
promptly with any such inquiry or request. Parent shall take any and all steps
necessary to avoid or eliminate each and every impediment under any antitrust,
competition or trade regulation law that may be asserted by any Governmental
Entity with respect to the Merger so as to enable the closing to occur as soon
as reasonably possible, including, without limitation, proposing, negotiating,
committing to and effecting, by consent decree, hold separate order or
otherwise, the sale, divestiture or disposition of such assets or businesses of
Parent or any of its Subsidiaries as may be required in order to avoid the entry
of, or to effect the dissolution of, any injunction, temporary restraining order
or other order in any suit or proceeding, which would otherwise have the effect
of preventing, delaying or restricting the consummation of the Transactions.
(c) Subject to the terms and conditions of this Agreement, in furtherance
and not in limitation of the covenants of the parties contained in Sections
6.06(a) and 6.06(b), if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any of the Transactions as violative of any antitrust,
competition or trade regulation law, each of the parties shall cooperate in all
respects with each other and shall use its respective best efforts in order 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 prevents, delays
or restricts consummation of the Transactions.
(d) Subject to the terms and conditions of this Agreement, in furtherance
and not in limitation of the covenants of the parties contained in Section
6.06(a), if any objections are asserted with respect to the Transactions under
any applicable law (other than any antitrust, competition or trade regulation
law) or if any suit is instituted by any Governmental Entity or any private
party challenging any of the Transactions as violative of any applicable law
(other than any antitrust, competition or trade regulation law), each of the
Company and Parent shall use its best efforts to resolve any such objections or
challenges such Governmental Entity or private party may have to such
Transactions so as to permit consummation of the Transactions.
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(e) The existence of the conditions set forth in Article 7 shall not limit
or diminish Parent's or Purchaser's obligations pursuant to this Section 6.06 or
relieve Parent or Purchaser of any liability or damages that may result from the
breach of its obligations under this Section 6.06.
SECTION 6.07 Indemnification, Advancement and Insurance. (a) After the
Effective Time, the Parent and the Surviving Corporation shall, jointly and
severally, to the fullest extent permitted by Delaware law, indemnify, defend
and hold harmless each Corporate Agent against all losses, costs, liabilities,
expenses (including attorney's and expert's fees and expenses), claims, fines,
penalties or damages in connection with any civil, criminal or arbitrative suit,
action, proceeding or investigation based in whole or in part on his or her
being or having been such a Corporate Agent prior to and including the Effective
Time (including but not limited to the Transactions). This obligation shall
include the obligation to pay expenses (including attorney's and expert's fees
and expenses) incurred by a Corporate Agent in defending any such suit, action,
proceeding or investigation in advance of the final disposition thereof,
including appeals.
(i) "Corporate Agent" shall mean any person who is or was at any time
prior to and including the Effective Time a director, officer, employee or agent
of the Company or any of its Subsidiaries, or any person who is or was at any
time prior to and including the Effective Time a director, officer, trustee,
employee or agent of any Other Enterprise, serving as such at the request of the
Company, or the heirs, executors and administrators of any such director,
officer, trustee, employee or agent.
(ii) "Indemnified Party" shall mean individually, and "Indemnified
Parties" shall mean collectively, the person or persons entitled to be
indemnified, defended and held harmless under this Section 6.07 or the heirs,
executors and administrators of such person or persons.
(iii) "Other Enterprise" shall mean any domestic or foreign corporation,
partnership, limited liability company, joint venture, sole proprietorship,
trust, or other enterprise or entity (including any employee benefit plan),
whether or not for profit, served by a Corporate Agent (other than the Company).
(b) Parent shall cause the certificate of incorporation and by-laws of the
Surviving Corporation and its Subsidiaries to include provisions for the
limitation of liability of directors and indemnification of the Indemnified
Parties to the fullest extent permitted under Delaware law and shall not permit
the amendment of such provisions in any manner adverse to the Indemnified
Parties without the prior written consent of the Indemnified Parties.
(c) Parent shall pay all expenses, including attorney's and expert's fees
and expenses, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.07 or in any
action involving an Indemnified Party resulting from the Transactions.
(d) For six years after the Effective Time (and thereafter until the final
disposition, including appeals, of any claim that has been asserted or any suit,
action, proceeding or investigation that has been commenced within such six-year
period), Parent shall maintain, or
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cause the Surviving Corporation to maintain, policies of directors' and
officers' liability insurance comparable to those currently maintained by the
Company for the benefit of directors and officers of the Company in effect on
the date of this Agreement (true and complete copies of which have been provided
to Parent) with respect to matters occurring prior to and including the
Effective Time (except to the extent any provisions in such insurance are no
longer generally available in the market); provided, that in no event shall the
Surviving Corporation be required to expend in any one year an amount in excess
of 300% of the aggregate annual premiums paid by the Company (or the Surviving
Corporation, as applicable) during the immediately preceding year for such
insurance (the Company represents that the annual premiums currently aggregate
approximately $500,000); and provided, further, that if the aggregate annual
premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain a policy or policies with the greatest
coverage available for an aggregate cost not exceeding such amount.
(e) In the event Parent, the Surviving Corporation or any of their
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 6.07. In the event that the Surviving Corporation
transfers any material portion of its assets, in a single transaction or in a
series of transactions, Parent will either guarantee the indemnification
obligations referred to in Section 6.07(a) or take such other action to ensure
that the ability of the Surviving Corporation to satisfy such indemnification
obligations will not be diminished.
(f) This Section 6.07 shall survive the consummation of the Merger, is
intended to benefit the Company, Parent, the Surviving Corporation and each
Indemnified Party, and shall be binding on all successors and assigns of Parent
and the Surviving Corporation.
SECTION 6.08 Employee Benefits. (a) After the Effective Time, Parent shall
cause the Surviving Corporation and each Subsidiary thereof to abide by the
terms of each collective bargaining agreement to which it is a party. In
addition, after the Effective Time through at least September 30, 2006, Parent
shall provide or cause to be provided to the individuals who, immediately prior
to the Effective Time, are non-bargaining unit employees of the Company or any
Subsidiary thereof ("Company Employees") (i) base pay and commission
opportunities which, as to each such individual, are the same as or greater than
those provided by the Company and its Subsidiaries immediately prior to the
Effective Time; and (ii) except as provided in Sections 6.08(d), (e) and (f),
welfare, pension and other employee benefits and incentive opportunities that
are no less favorable in the aggregate than those provided as of the date hereof
by the Company and its Subsidiaries to such individuals under the Employee
Plans. At the Effective Time, the Company shall pay or cause the payment of
bonuses accrued during the period from December 27, 2004 until the Effective
Time in accordance with the bonus targets and Company performance through the
end of such period. For the period from the Effective Time through September 30,
2005, Parent shall cause the Surviving Corporation to establish a bonus
arrangement consistent with the bonus arrangement provided by Parent and its
Affiliates to similarly situated employees, taking into account the fact that
the bonus period will be less than twelve months. From and after October 1,
2005, the Surviving Corporation shall provide
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such bonus opportunities as it deems appropriate. Nothing contained in this
subsection shall preclude the Parent or the Surviving Corporation or its
Subsidiaries at any time following the Effective Time from terminating the
employment of any Company Employee.
(b) Each Company Employee shall be given full credit for all service with
the Company and its Subsidiaries and their respective predecessors to the extent
recognized by the Company and its Subsidiaries at December 26, 2004 under any
plans or arrangements providing vacation, sick pay, severance, retirement,
pension or retiree welfare benefits maintained by Parent or the Surviving
Corporation or any of their respective Affiliates in which such Company
Employees participate for all purposes (including, without limitation, for
purposes of eligibility, vesting, benefit accrual and forms of benefit), except
to the extent that such credit would result in any duplication of benefits.
(c) In the event of any change in the welfare benefits provided to Company
Employees following the Effective Time, Parent shall or shall cause the
Surviving Corporation to (i) waive all limitations as to pre-existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Company Employees under any such welfare
benefits to the extent that such conditions, exclusions or waiting periods would
not apply in the absence of such change and (ii) credit each Company Employee
with any co-payments and deductibles paid prior to any such change in satisfying
any applicable deductible or out-of-pocket requirements after such change.
(d) Without limiting any of its other obligations hereunder, Parent shall
cause all of the individual agreements and other Company plans and arrangements
listed in Items 1, 2, 4, 5 and 20 under Section 4.11 of the Company Disclosure
Memorandum to be honored in accordance with their terms if and to the extent
such agreements, plans and arrangements have been or are made effective, and
shall assume the obligations of the Company and its Subsidiaries thereunder
without offset.
(e) From the Effective Time until September 30, 2007, Parent and the
Surviving Corporation shall provide or shall cause their Affiliates to provide
post-retirement group health coverage to Eligible Company Retirees on terms and
conditions that are, in the aggregate, no less favorable than the terms and
conditions of the retiree group health coverage currently provided by the
Company to or for the benefit of retired Eligible Company Retirees. Thereafter,
until December 31, 2008, Parent and the Surviving Corporation shall continue to
offer retiree group health coverage to Eligible Company Retirees. Such coverage
shall be on such terms and conditions relating to benefits and cost-sharing as
from time to time are determined by the Board of Directors of Parent and/or the
Surviving Corporation. As used herein, the term "Eligible Company Retirees"
means (i) former non-bargaining unit employees of the Company or any Subsidiary
thereof (and their covered spouses and dependents) who, as of the Effective
Time, are covered or entitled to coverage under the Company's post-retirement
group health plan, (ii) active Company Employees whose employment terminates
after the Effective Time and who, as of the Effective Time, have satisfied the
minimum age and service conditions for Company provided post-retirement group
health coverage, and (iii) active Company Employees listed in Section 6.08(e) of
the Company Disclosure Memorandum whose employment is terminated either (A)
after satisfying the age and service conditions, or (B) before satisfying those
conditions under circumstances entitling them to receive one or more severance
payments,
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whether by individual agreement or applicable severance policy. The obligations
of Parent and the Surviving Corporation under this Section 6.08(e) will also
extend to the covered spouses and dependents of the present and former Company
Employees who are or become Eligible Company Retirees.
(f) If, as of or within May 31, 2006, Parent, the Company, the Surviving
Corporation or any of its or their Affiliates causes the involuntary termination
(other than termination for "cause") of a Company Employee's employment with the
Surviving Corporation, the Company and/or its Subsidiaries, then the terminated
Company Employee will be entitled to receive severance payments in accordance
with the Company's severance grid set forth in Section 6.08(f) of the Company
Disclosure Memorandum if such grid would have applied to such Company Employee
if he or she had been severed by the Company before the Effective Time, or, if
not, to no less than two weeks' base pay for each year of service with the
Company or any of its Subsidiaries (and their respective predecessors), prorated
for the year in which termination of employment occurs, limited, however, to 50
weeks' base pay, and subject to a minimum of four weeks' base pay. The severance
protection described in this Section 6.08(f) shall not apply to Company
Employees whose severance entitlement is governed by the terms of an employment
agreement, transition agreement, participation agreement or other individual
agreement providing severance protection outside of the Company's general
severance policy. Outplacement services described in Section 6.08(f) of the
Company Disclosure Memorandum will also be made available. Any Company Employee
whose employment is terminated within one year following the Effective Time and
who is entitled to severance payments will be credited with not less than one
year of post-Effective Time service for purposes of vesting under any Employee
Plan in which such terminated Company Employee then participates, except to the
extent that such credit would result in any duplication of benefits.
(g) Prior to and effective as of the Effective Time, the Company will
amend the Pulitzer Inc. Supplemental Executive Benefit Pension Plan (the "SERP")
in the following respects: (i) future benefit accruals will be suspended, (ii)
each participant's accrued benefit will be converted into a bookkeeping account
balance in the amounts set forth in Section 6.08(g) of the Company Disclosure
Memorandum (the "SERP Schedule"), (iii) each participant's account balance will
be credited with interest at the annual rate of 5.75%, and (iv) each participant
will be entitled to receive payments which will be deducted from his or her
account balance at the time(s) and in the amount(s) set forth in the SERP
Schedule. Parent will make or cause the Surviving Corporation to make the
payments set forth in the SERP Schedule, which payments, when completed, will be
in full and final satisfaction of the participants' interest in the SERP. The
Company's SERP amendments will include a provision for full payment of the
participants' account balances upon a change in control (defined substantially
as set forth in Section 6.08(g) of the Company Disclosure Memorandum) of the
Parent or the Surviving Corporation, and such other provisions as may be
reasonably necessary in order to satisfy the applicable requirements of Section
409A of the Code. As of and prior to the Effective Time, the Company shall
satisfy in full the remaining future payment obligations of the Company under
the executive employment and consulting agreement listed in Item 2 of Section
4.14 of the Company Disclosure Memorandum. Prior to the Effective Time, the
Company shall terminate the Company's 1999 Employee Stock Purchase Plan and the
Company's 2000 Stock Purchase Plan (and any other such plan listed in Section
4.11(6) of the Company Disclosure Memorandum (collectively, the "Company Stock
Plans")), and no shares shall be issued under the Company Stock Plans after
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such date. The Company agrees that, during the period beginning on the date
hereof and ending prior to the Effective Time, except as described under Section
4.02(a) with respect to shares issuable under outstanding Company Stock Options
or Company RSUs, and shares purchasable under any employee stock purchase plan,
the Company shall not issue shares of Common Stock in the aggregate that exceed
the average number of shares, determined on a quarterly basis, issued under the
Company Stock Plans for the last two fiscal quarters prior to the date hereof
(which amounts and the price at which such shares may be purchased under the
terms thereof are listed in Section 4.11(6) of the Company Disclosure
Memorandum). Prior to the Effective Time, the Company will use its commercially
reasonable efforts to terminate (as of or immediately prior to the Effective
Time) the Company's interest in and obligations under the split dollar life
insurance agreements and policies listed in Section 4.11 of the Company
Disclosure Memorandum maintained for five covered current and former executives,
at a cost to the Company not to exceed the then current cash values of the
policies plus the amounts of the premium payments that were withheld since July
30, 2002, or such greater amounts as the Company deems necessary in order to
accomplish the foregoing. Any split dollar arrangement which is not so
terminated will be assumed and honored by the Surviving Corporation in
accordance with its terms.
SECTION 6.09 Public Announcements. Each of Parent and the Company will
obtain the other's prior written consent before issuing any press release or
making any public statement (including any broadly issued statement or
announcement to employees) with respect to this Agreement or the Transactions
and, except as may be required by applicable law or any listing agreement with
any national securities exchange, will not issue any such press release or make
any such public statement prior to obtaining such consent.
SECTION 6.10 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Purchaser, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Purchaser, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
SECTION 6.11 Notices of Certain Events. Each of the Company and Parent
shall promptly notify the other of:
(a) any representation or warranty made by it in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate so as to have a Material Adverse Effect;
(b) the failure by it to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement;
(c) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
Transactions;
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(d) any notice or other communication from any Governmental Entity in
connection with the Transactions; or
(e) any actions, suits, claims, investigations, orders, decrees,
complaints or proceedings commenced or, to its Knowledge, threatened against,
relating to or involving or otherwise affecting the Company, Parent or any of
their respective Subsidiaries that relate to the consummation of the
Transactions;
provided, however, that the delivery of any notice pursuant to this Section 6.11
(i) shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice and (ii) shall not be deemed an admission on the
part of the party giving such notice that the occurrence of any such event
constitutes or would reasonably be likely to have a Material Adverse Effect.
SECTION 6.12 Certain Operational Matters. (a) For a period of at least
five years following the Effective Time, Parent will cause the St. Louis
Post-Dispatch to maintain its current name and editorial page platform statement
and to maintain its news and editorial headquarters in the City of St. Louis,
Missouri. In addition, if the current editor of the St. Louis Post-Dispatch is
replaced within five years following the Effective Time, whether by reason of
her resignation or removal or for any other reason, Parent will not appoint or
allow to be appointed a new editor of the St. Louis Post-Dispatch without the
prior consultation with the Company Designee.
(b) Following the Effective Time, Parent agrees that (i) it will not use
or allow to be used the "Pulitzer" name in connection with any business or other
endeavor not reasonably related to the media businesses in which the Company and
its Subsidiaries are currently engaged and (ii) it will use commercially
reasonable efforts to preserve the historical goodwill of the "Pulitzer" name,
including, without limitation, using commercially reasonable efforts to ensure
that the name is used only in connection with products and services that are
substantially consistent in nature, quality and style with the products and
services in connection with which the name has been historically used by the
Company.
(c) The Surviving Corporation shall cause St. Louis Post-Dispatch LLC ("PD
LLC") or its successor from the Effective Time until September 30, 2009, to make
aggregate contributions, in the name of Pulitzer Inc. or PD LLC, of at least
0.25% of total revenues of PD LLC, the sum of which shall be used to fund the
commitments set forth in Section 4.14(8) of the Company Disclosure Memorandum
and the remainder thereof for contributions to 501(c)(3) organizations that are
located in the states of Missouri or Illinois after funding at least $60,000 to
the Columbia University Graduate School of Journalism in support of the
activities relating to the award of the Pulitzer Prizes.
(d) Prior to the Effective Time, the Board of Directors of the Company
shall appoint a committee consisting of three of its members (the "Designation
Committee"), and following the Effective Time, the covenants made by Parent in
this Section 6.12 may be enforced by the designee (the "Company Designee")
selected from time to time by the Designation Committee. Each member of the
Designation Committee shall serve until his or her death or resignation and may
appoint his or her successor in writing; provided, that any vacancy in the
Designation Committee arising because a successor has not been appointed or
because a member or successor
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is unable to serve for any reason shall be filled by the remaining members of
the Designation Committee.
(e) Parent agrees that it shall not, directly or indirectly, consolidate
with or merge into any other Person or transfer all or substantially all of its
properties and assets to any other Person without causing such other Person to
assume the obligations set forth in this Section 6.12. In addition, Parent shall
not, directly or indirectly, sell, transfer or license (or allow to be sold,
transferred or licensed) (A) the St. Louis Post-Dispatch without requiring the
purchaser, transferee or licensee thereof to be bound by the covenants set forth
in Sections 6.12(a) and (d) or (B) the "Pulitzer" name without requiring the
purchaser, transferee or licensee thereof to be bound by the covenants set forth
in Sections 6.12(b) and (d).
SECTION 6.13 Solvency Opinion. In the event Parent or Purchaser is
required to deliver or cause to be delivered in connection with the financing of
the Transactions, or actually delivers or causes to be delivered, a letter or
opinion with respect to the solvency, sufficiency of assets, sufficiency of
capital or any similar or related status, in each case, of the Parent,
Purchaser, the Company or any of their respective Subsidiaries, then Parent and
Purchaser shall, at their expense, cause such letter or opinion to (i) be
delivered to the Company and (ii) contain a statement that the Company and its
stockholders may rely on such letter or opinion as though such letter or opinion
had been addressed to the Company and its stockholders.
ARTICLE 7
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to Obligations of Each Party. The respective
obligations of the Company, Parent and Purchaser to consummate the Merger are
subject to the satisfaction or waiver of the following conditions:
(a) this Agreement shall have been adopted by the Required Vote at the
Company Stockholder Meeting;
(b) no statute, rule or regulation shall have been enacted, promulgated or
deemed applicable to the Merger by any Governmental Entity which prevents the
consummation of the Merger or makes the consummation of the Merger unlawful, and
no temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction preventing, prohibiting or
restraining the consummation of the Merger shall be in effect; provided,
however, that each of the parties shall have used commercially reasonable
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any injunction or other order that may be entered; and
(c) any waiting period (and any extension thereof) under the HSR Act
applicable to the Merger shall have expired or been terminated.
SECTION 7.02 Conditions to Obligations of Parent and Purchaser. The
obligations of Parent and Purchaser to consummate the Merger are subject to the
satisfaction (or waiver by Parent and Purchaser) of the following conditions:
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(a) the Company shall have performed all of its obligations, covenants and
agreements hereunder required to be performed or complied with by it at or prior
to the Effective Time, disregarding for these purposes any exception with
respect to such obligation, covenant or agreement qualified by "Material Adverse
Effect," "material," "materiality" and words of similar import, except for such
failures to perform which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company;
provided, however, that for purposes of this Section 7.02(a), "Material Adverse
Effect" on the Company shall mean a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole;
(b) except as affected by actions specifically described in and permitted
by this Agreement, the representations and warranties of the Company contained
in this Agreement shall be true on and as of the closing date as if made on and
as of such date (other than to the extent that any such representation and
warranty, by its terms, is expressly limited to a specific date, in which case
such representation and warranty shall be true as of such date), disregarding
for these purposes any exception in such representation or warranty qualified by
"Material Adverse Effect," "material," "materiality" and words of similar
import, except for such failures to be true which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company; provided, however, that for purposes of this Section 7.02(b),
"Material Adverse Effect" on the Company shall mean a Material Adverse Effect on
the Company and its Subsidiaries taken as a whole;
(c) Parent shall have received a certificate signed on behalf of the
Company by the President or Chief Executive Officer or a Vice President of the
Company certifying as to the satisfaction of the conditions contained in
Sections 7.02(a) and (b); and
(d) Each of the Company and its Subsidiaries shall have delivered to
Parent all of the certificates, instruments and other documents required to be
delivered by such company or by any Person retained by the Company and its
Subsidiaries at or prior to the closing date as required by this Agreement.
SECTION 7.03 Conditions to Obligation of the Company. The obligation of
the Company to consummate the Merger is subject to the satisfaction (or waiver
by the Company) of the following conditions:
(a) Each of Parent and Purchaser shall have performed all of its
obligations, covenants and agreements hereunder required to be performed or
complied with by it at or prior to the Effective Time (including its obligations
under Section 3.02(a) of this Agreement), disregarding for these purposes any
exception with respect to such obligation, covenant or agreement qualified by
"Material Adverse Effect," "material," "materiality" and words of similar
import, except for such failures to perform which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Parent or Purchaser or materially impair the ability of Parent or Purchaser to
consummate the Transactions on the terms and conditions provided for herein;
provided, however, that for purposes of this Section 7.03(a), "Material Adverse
Effect" on the Parent shall mean a Material Adverse Effect on the Parent and its
Subsidiaries taken as a whole;
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(b) except as affected by actions specifically described in and permitted
by this Agreement, the representations and warranties of Parent and Purchaser
contained in this Agreement shall be true on and as of the closing date as if
made on and as of such date (other than to the extent that any such
representation and warranty, by its terms, is expressly limited to a specific
date, in which case such representation and warranty shall be true as of such
date), disregarding for these purposes any exception in such representation or
warranty qualified by "Material Adverse Effect," "material," "materiality" and
words of similar import, except for such failures to be true which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Parent or Purchaser or materially impair the ability of Parent or
Purchaser to consummate the Transactions on the terms and conditions provided
for herein; provided, however, that for purposes of this Section 7.03(b),
"Material Adverse Effect" on the Parent shall mean a Material Adverse Effect on
the Parent and its Subsidiaries taken as a whole;
(c) the Company shall have received a certificate signed on behalf of the
Parent by the President or Chief Executive Officer or a Vice President of the
Parent certifying as to the satisfaction of the conditions contained in Sections
7.03(a) and (b); and
(d) Each of the Parent and Purchaser shall have delivered to Company all
of the certificates, instruments and other documents required to be delivered by
such company or by any Person retained by Parent or Purchaser at or prior to the
closing date as required by this Agreement.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination. This Agreement may be terminated, and the Merger
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after the adoption of this Agreement by the stockholders of
the Company:
(a) by mutual written consent duly authorized by the Board of Directors of
each of Parent, Purchaser and the Company;
(b) by either the Company or Parent if:
(i) any Governmental Entity shall have issued an order, decree or ruling
or taken any other action (which order, decree, ruling or other action the
parties hereto shall use their reasonable best efforts to lift) restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; provided, however, that
the right to terminate this Agreement pursuant to this Section 8.01(b)(i) shall
not be available to any party whose breach of any provision of this Agreement
results in the imposition of such order, decree or ruling or other action or the
failure of such order, decree or ruling or other action to be resisted, resolved
or lifted, as applicable;
(ii) the Merger shall not have been consummated by August 2, 2005, unless
the failure to consummate the Merger is the result of a breach of this Agreement
by the party seeking to terminate this Agreement; or
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(iii) if, at the Company Stockholder Meeting (including any adjournment
thereof), the Required Vote shall not have been obtained;
(c) by the Company:
(i) if the Company has complied with its obligations under Section 6.05,
the Company has received an unsolicited Acquisition Proposal that the Board of
Directors determines in good faith is a Superior Proposal, and then only in
connection with its entering into an agreement with respect to such Superior
Proposal; provided, that the Company pays the Termination Fee; or
(ii) if Parent or Purchaser shall have breached any representation,
warranty, covenant or other agreement contained in this Agreement, which breach,
individually or in the aggregate, would reasonably be expected to materially
impair the ability of Parent or Purchaser to consummate the Transactions on the
terms and conditions set forth herein and cannot be or has not been cured within
30 days after the giving of written notice to Parent or Purchaser, as
applicable;
(d) by Parent:
(i) if the Company shall have breached any representation, warranty,
covenant or other agreement contained in this Agreement (disregarding for these
purposes any exception with respect to such representation, warranty, covenant
or other agreement qualified by "Material Adverse Effect," "material,"
"materiality" and words of similar import), which breach, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect
on the Company and cannot be or has not been cured, in all material respects,
within 30 days after the giving of written notice to the Company; provided,
however, that for purposes of this Section 8.01(d)(i), "Material Adverse Effect"
on the Company shall mean a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole;
(ii) if, (A) whether or not permitted to do so, the Board of Directors of
the Company shall have withdrawn or modified (in a manner adverse to Parent or
Purchaser) its approval or recommendation of the Merger or this Agreement, or
approved or recommended any Acquisition Proposal, (B) a tender or exchange offer
relating to any Company Securities has been commenced and the Company fails to
send to its security holders, within ten Business Days after the commencement of
such tender or exchange offer, a statement disclosing that the Company
recommends the rejection of such tender or exchange offer or (C) an Acquisition
Proposal is publicly announced, and the Company fails to issue, within ten
Business Days after such Acquisition Proposal is announced, a press release that
reaffirms the recommendation of the Board of Directors of the Company that the
stockholders of the Company vote in favor of the adoption of this Agreement; or
(iii) if the Company breaches any of its obligations under Section 6.03 in
any material respect or any of its obligations under Section 6.05.
The party desiring to terminate this Agreement pursuant to Section
8.01(b), Section 8.01(c) or Section 8.01(d) shall give written notice of such
termination to the other parties in accordance with Section 9.02.
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SECTION 8.02 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.01, this Agreement shall forthwith become
void and have no effect (other than the provisions of Article 1, Section 6.04
(last sentence only), this Section 8.02, Section 8.03, and Article 9, which
shall survive any termination), without any liability or obligation on the part
of Parent, Purchaser or the Company, except to the extent that such termination
results from the breach by a party of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 8.03 Fees and Expenses. (a) Except as set forth otherwise herein,
all fees and expenses incurred in connection with the Merger, this Agreement and
the Transactions shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated.
(b) The Company shall pay, or cause to be paid, to Parent a fee equal to
$55 million (the "Termination Fee") if (1)(x) this Agreement is terminated by
Parent or the Company pursuant to Section 8.01(b)(ii), or by Parent pursuant to
Section 8.01(d)(i), Section 8.01(d)(ii)(B) or (C), or Section 8.01(d)(iii), (y)
at any time after the date hereof an Acquisition Proposal shall have been
publicly announced or otherwise communicated to the Board of Directors of the
Company and (z) within 12 months of the termination of this Agreement, the
Company enters into a definitive agreement with any third party with respect to
an Acquisition Proposal or similar transaction, or any such transaction is
consummated; (2) this Agreement is terminated by the Company pursuant to Section
8.01(c)(i); or (3) this Agreement is terminated by Parent pursuant to Section
8.01(d)(ii)(A); provided that if a fee already has been paid to Parent pursuant
to Section 8.03(c), the Termination Fee shall be equal to $55 million minus the
amount actually paid to Parent pursuant to Section 8.03(c).
(c) The Company shall pay, or cause to be paid, to Parent a fee equal to
$30 million plus actual documented expenses (not to exceed $12 million) if this
Agreement is terminated by Parent or the Company pursuant to Section
8.01(b)(iii).
(d) Any Termination Fee shall be paid by wire transfer of same day funds
to an account designated by Parent within two Business Days after a demand for
payment by Parent following termination of this Agreement; provided, that in the
event of a termination of this Agreement under Section 8.01(c)(i), the
Termination Fee shall be paid as therein provided as a condition to the
effectiveness of such termination.
SECTION 8.04 Amendment. This Agreement may be amended by the parties
hereto at any time before or after the adoption of this Agreement by the
stockholders of the Company; provided, however, that after any such adoption,
there shall be made no amendment that by law requires further adoption of this
Agreement by the stockholders of the Company without such further adoption. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 8.05 Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto on the part of the other parties or (c) subject to the
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proviso contained in the first sentence of Section 8.04, waive compliance with
any of the agreements or conditions contained herein on the part of the other
parties. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement. This Section 9.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
SECTION 9.02 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given
if to Parent or Purchaser, to:
Xxx Enterprises, Incorporated
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx, Chairman, President & CEO
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Lane & Xxxxxxxx LLP
000 X. Xxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, XX 00000
Attn: C. Xxxx Xxxxxxxx III, Esq.
Fax: (000) 000-0000
if to the Company, to:
Pulitzer Inc.
000 X. Xxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Xxxxxxxxx: Xxxxxxx Xxxx, Xxx.
Fax: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a Business Day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given shall be deemed to be receipt of the notice as of
the date of such rejection, refusal or inability to deliver.
SECTION 9.03 No Waivers. No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 9.04 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Purchaser
may transfer or assign, in whole or from time to time in part, to one or more of
its Affiliates, the right to enter into the Transactions, but no such transfer
or assignment will relieve Parent or Purchaser of its obligations hereunder.
SECTION 9.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the conflicts of law rules of such state.
SECTION 9.06 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the Transactions may be brought in any federal or state
court located in the State of Delaware, and each of the parties hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 9.02
shall be deemed effective service of process on such party.
SECTION 9.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
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SECTION 9.08 Counterparts; Effectiveness; Benefit. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Sections 6.07 and 6.12 (which are intended to be for the
benefit of the Persons provided for therein and may be enforced by such
Persons), no provision of this Agreement is intended to confer any rights,
benefits, remedies, obligations or liabilities hereunder upon any Person other
than the parties hereto and their respective permitted successors and assigns.
Execution of this Agreement may be made by facsimile signature which, for all
purposes, shall be deemed to be an original signature.
SECTION 9.09 Entire Agreement. This Agreement, the Company Disclosure
Memorandum and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior and contemporaneous representations, warranties, agreements
and understandings, both oral and written, between the parties with respect to
the subject matter of this Agreement. No prior drafts of this Agreement or
portions thereof shall be admissible into evidence in any action, suit or other
proceeding involving this Agreement.
SECTION 9.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby.
SECTION 9.11 Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal or state court located in the State of Delaware, in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 9.12 Interpretation. When a reference is made in this Agreement to
an Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. The table of contents to this Agreement
and the Article and Section headings are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms 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, modified or
supplemented, including (in the case of agreements or
-44-
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. Each of the parties has participated in the
drafting and negotiation of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement must be construed as if it is
drafted by all the parties and no presumption or burden of proof will arise
favoring or disfavoring any party by virtue of authorship of any of the
provisions of this Agreement.
SECTION 9.13 Company Disclosure Memorandum. The Company Disclosure
Memorandum referred to in this Agreement is hereby incorporated in this
Agreement and made a part of this Agreement for all purposes as if fully set
forth in this Agreement. Any matter disclosed in a section of the Company
Disclosure Memorandum shall be treated as if it were disclosed in other sections
of the Company Disclosure Memorandum to which it reasonably applies. No
disclosure in the Company Disclosure Memorandum shall be deemed to constitute an
admission or representation or raise any inference that such matter rises to the
level of materiality or is determinative of any standard of materiality.
SECTION 9.14 Personal Liability. Neither this Agreement nor any other
document delivered in connection with this Agreement shall create or be deemed
to create or permit any personal liability or obligation on the part of any
officer or director of the Company or any Subsidiary of the Company.
SECTION 9.15 Obligations of Parent and the Company. Whenever this
Agreement requires Purchaser or another Subsidiary of Parent to take any action,
such requirement shall be deemed to include an undertaking on the part of Parent
to cause Purchaser or such Subsidiary to take such action and a guarantee on the
part of Parent of the performance thereof. Whenever this Agreement requires the
Surviving Corporation to take any action, from and after the Effective Time,
such requirement shall be deemed to include an undertaking on the part of Parent
to cause the Surviving Corporation to take such action and a guarantee on the
part of Parent of the performance thereof. Whenever this Agreement requires the
Company to take any action after the Effective Time, such requirement shall be
deemed to include an undertaking on the part of Parent to cause the Surviving
Corporation to take such action and a guarantee on the part of Parent of the
performance thereof. Whenever this Agreement require a Subsidiary of the Company
to take any action, such requirement shall be deemed to include an undertaking
on the part of the Company to cause such Subsidiary to take such action and a
guarantee on the part of the Company of the performance thereof.
SECTION 9.16 Certain Definitions. As used in this Agreement:
(a) The term "Acquisition Proposal" shall mean any offer or proposal for a
merger, reorganization, consolidation, share exchange, business combination, or
other similar transaction involving the Company or any proposal or offer to
acquire, directly or indirectly, securities representing more than 20% of the
voting power of the Company or more than 20% of the consolidated net assets of
the Company and its Subsidiaries taken as a whole, other than the Transactions.
-45-
(b) The term "Affiliate," as applied to any Person, shall mean any other
Person directly or indirectly Controlling, Controlled by, or under common
Control with, that Person; for purposes of this definition, "Control"
(including, with correlative meanings, the terms "Controlling," "Controlled by,"
and "under common Control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.
(c) A Person will be deemed to "Beneficially" own securities if such
Person would be the beneficial owner of such securities under Rule 13d-3 under
the Exchange Act, including securities which such Person has the right to
acquire (whether such right is exercisable immediately or only after the passage
of time).
(d) The term "Business Day" means any day on which commercial banks are
open for business in New York, New York other than a Saturday, a Sunday or a day
observed as a holiday in New York, New York under the laws of the State of New
York or the federal laws of the United States.
(e) The term "Knowledge" or any similar formulation of "Knowledge" shall
mean, with respect to the Company, the actual knowledge of the Company's
executive officers and each publisher or the most senior executive officer, as
the case may be, of any of its Subsidiaries (except that where the Company's
"Knowledge" relates to TNI Partners, "Knowledge" shall mean the actual knowledge
of the Company's executive officers and the publisher of Star Publishing
Company), and with respect to the Parent, the actual knowledge of the Parent's
executive officers.
(f) The term "Person" shall include individuals, corporations,
partnerships, trusts, limited liability companies, associations, unincorporated
organizations, joint ventures, other entities, groups (which then shall include
a "group" as such term is defined in Section 13(d)(3) of the Exchange Act),
labor unions and Governmental Entities.
(g) The term "Significant Subsidiaries" shall mean Flagstaff Publishing
Co., Pantagraph Publishing Co., Pulitzer Newspapers, Inc., Pulitzer
Technologies, Inc., St. Louis Post-Dispatch LLC, Star Publishing Company, STL
Distribution Services LLC and Suburban Journals of Greater St. Louis LLC.
(h) The term "Solvent" shall mean, with respect to any Person, that (i)
the property of such Person, at a fair valuation, exceeds the sum of its debts
(including contingent and unliquidated debts), (ii) the present fair saleable
value of the property of such Person exceeds the amount that will be required to
pay such Person's probable liability on its existing debts as they become
absolute and matured, (iii) such Person does not have unreasonably small capital
with which to conduct its business and (iv) such Person does not intend or
believe that it will incur debts beyond its ability to pay as they mature. For
purposes of this definition, the amount of contingent or unliquidated
liabilities at any time shall be the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become actual or matured liabilities.
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(i) The term "Superior Proposal" shall mean a bona fide written
Acquisition Proposal to acquire more than 50% of the voting power of the Company
or all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole which the Board of Directors of the Company determines in good
faith (after consultation with a financial advisor of nationally recognized
reputation and taking into account all the terms and conditions of the
Acquisition Proposal) is (i) more favorable to the Company and its stockholders
(in their capacities as stockholders) from a financial point of view than the
Transactions and (ii) reasonably capable of being completed, including a
conclusion that its financing, to the extent required, is then committed or is,
in the good faith judgment of the Board of Directors of the Company, reasonably
capable of being financed by the Person making such Acquisition Proposal.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PARENT:
XXX ENTERPRISES, INCORPORATED
By: /s/ XXXX X. XXXXX
---------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
PURCHASER:
LP ACQUISITION CORP.
By: /s/ XXXX X. XXXXX
----------------------------------
Name: Xxxx X. Xxxxx
Title: President
COMPANY:
PULITZER INC.
By: /s/ XXXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and
Chief Executive Officer
ANNEX A
CERTIFICATE OF MERGER
OF
LP ACQUISITION CORP., A DELAWARE CORPORATION,
INTO
PULITZER INC., A DELAWARE CORPORATION
* * * * *
PURSUANT TO SECTION 251(c) OF THE DELAWARE GENERAL CORPORATION LAW
* * * * *
The undersigned, being the Surviving Corporation, hereby sets forth as
follows:
FIRST: The name and state of incorporation of each of the constituent
corporations to the merger are LP ACQUISITION CORP., a Delaware corporation, and
PULITZER INC., a Delaware corporation.
SECOND: An Agreement and Plan of Merger has been approved, adopted,
certified, executed and acknowledged by each of the constituent corporations in
accordance with Section 251 of the Delaware General Corporation Law.
THIRD: The name of the Surviving Corporation is PULITZER INC.
FOURTH: The Certificate of Incorporation of the Surviving Corporation
shall be amended to read in its entirety as set forth in Exhibit A attached
hereto.
FIFTH: The executed Agreement and Plan of Merger is on file at the
principal place of business of the Surviving Corporation. The address of the
Surviving Corporation is 000 Xxxxx Xxxxxx Xxxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
SIXTH: A copy of the Agreement and Plan of Merger will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.
* * *
IN WITNESS WHEREOF, this Certificate of Merger is hereby executed this __
day of ___________, 2005.
PULITZER INC.
By:___________________________
Name:
Title:
EXHIBIT A
Certificate of Incorporation
of
Pulitzer Inc.
RESTATED
CERTIFICATE OF INCORPORATION
OF
PULITZER INC.
Pulitzer Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1) The name of the corporation is Pulitzer Inc. The date
of filing its original Certificate of Incorporation
was May 22, 1998. The Certificate of Incorporation
was restated on February 5, 1999.
2) This Restated Certificate of Incorporation restates
the original Certificate of Incorporation, and
integrates the Certificate of Merger filed of equal
date herewith.
3) This Restated Certificate of Incorporation was duly
adopted in accordance with Section 245 of the General
Corporation Law of Delaware.
RESOLVED, the text of the Certificate of Incorporation be
restated and amended as follows:
FIRST: The name of the corporation is Pulitzer Inc.
(hereinafter referred to as the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware shall be at Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of New Castle,
Delaware and the name of its registered agent at such address shall be
The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of Delaware (the "GCL").
FOURTH: The total number of shares of stock which the
Corporation shall have the authority to issue is ten thousand (10,000)
shares of Class A voting common stock, with a par value of one dollar
($1.00) per share.
FIFTH: The Corporation shall indemnify and advance expenses to
the fullest extent permitted by Section 145 of the GCL, as amended from
time to time, each person who is or was a director or officer of the
Corporation and the heirs, executors and administrators of such person.
Any expenses (including attorneys' fees) incurred by each person who is
or was a director or officer of the Corporation, and the heirs,
executors and administrators of such person, in connection with
defending any such proceeding in
advance of its final disposition shall be paid by the Corporation;
provided, however, that if the GCL requires, an advancement of expenses
incurred by an indemnitee in his capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such indemnitee to repay all amounts so
advanced, if it shall ultimately be determined that such indemnitee is
not entitled to be indemnified for such expenses under this Article or
otherwise.
SIXTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or
between the Corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may, on
the application in a summary way of the Corporation or of any creditor
or stockholder thereof or on the application of any receiver or
receivers appointed for the Corporation under the provisions of Section
291 of the GCL or on the application of trustees in dissolution or of
any receiver or receivers appointed for the Corporation under the
provisions of Section 279 of the GCL, order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of the Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
the Corporation, as the case may be, and also on the Corporation.
SEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by law, and
all rights and powers conferred on the stockholders, directors and
officers herein are granted subject to this reserved power.
EIGHTH: No director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for
the breach of any fiduciary duty as a director, except (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the GCL, as the same exists or hereafter may be
amended, or (iv) for any transaction from which the director derived an
improper personal benefit. If the GCL is amended after the date of
incorporation of the Corporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the GCL, as so amended.
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Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall be prospective only, and shall
not adversely affect any limitation on the personal liability of a
director of the Corporation existing at the time of such repeal or
modification.
IN WITNESS WHEREOF, Pulitzer Inc. has caused this Restated
Certificate of Incorporation to be signed by its __________________ and attested
to by its Secretary this _____ day of __________________________, 2005.
PULITZER INC.
By:
-----------------------------------
Its:
ATTEST:
By:
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C. Xxxx Xxxxxxxx III, Secretary
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